According to CNBC, the proposal would hold crypto firms to the same standards as traditional finance. Reeves called it a move to boost protection, transparency, and resilience in crypto.
This announcement marks a turning point for the U.K. The U.K. is trying to balance crypto innovation with investor protection.
Crypto to Face Traditional Standards
Under the proposed framework, any crypto firm serving U.K. customers would need to meet standards typically expected of banks or investment firms. These include rules for how customer funds are stored and what level of disclosure is required. Platforms must also prepare for potential operational disruptions.
The announcement follows a broader trend in Europe, with the EU already moving forward with MiCA, a unified crypto policy set to take effect soon. In contrast, the U.S. has taken a more fragmented approach, with the SEC and CFTC often clashing over who regulates what. Reeves is calling for closer U.S.–U.K. cooperation, recognizing that crypto is a borderless technology requiring coordinated oversight.
She launched draft cryptoasset legislation and set out plans for deeper UK-US digital cooperation pic.twitter.com/3p0J2xF5B6
— Innovate Finance (@InnFin) April 29, 2025
A real-world example of the risks the new rules aim to address: In 2022, the collapse of the FTX exchange left over 80,000 U.K. users exposed, with many unaware of the lack of legal protections. The government’s new direction is a response to such events, aiming to close gaps that leave everyday investors vulnerable.
More About Crypto Regulation
Former CFTC Chair Rostin Behnam recently shared his perspective on the evolving landscape of crypto regulation. He emphasized the need for agencies to be fully equipped to handle the growing complexity of digital asset markets.
Former CFTC Chair Rostin Behnam discusses what he’s seeing in terms of crypto regulation and says regulators will need to be well staffed to be ready to protect markets https://t.co/wrLobpRKXT pic.twitter.com/6HMq2zE8Bf
— Bloomberg TV (@BloombergTV) April 29, 2025
He noted that as crypto continues to mature and integrate with traditional finance, regulators must be well-staffed and resourced. This will enable them to monitor risks effectively and protect market integrity. Behnam highlighted that without proper oversight, the fast-paced nature of crypto could expose investors to unnecessary vulnerabilities. He also warned that this could affect the broader financial system.
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