UK regulators including the Treasury and Bank of England have hinted at plans to turn the screws on crypto assets and NFTs in 2022.
Crypto assets and NFTs have witnessed an explosion of interest in the past year: major football clubs have issued fan tokens, enthusiasts have forked out top dollar for highly speculative online art and institutions have poured increasingly large sums into decentralized finance (DeFi).
The recent hype around crypto assets has caused growing concern amongst UK regulators who are calling for increased oversight of the industry amid concerns about inadequate consumer protections, the i paper first reported.
While it is not entirely clear whose responsibility it will be to regulate digital assets the Advertising Standards Agency has become a frontrunner in the space. The ASA has already banned crypto adverts by Arsenal, Coinbase and Papa John’s and a spokesperson told City A.M. new guidelines on crypto advertising could be
“Cryptoassets are a red-alert priority issue for us, so we’re conducting proactive monitoring and interventions where we find issues. Our rulings… will shape follow-up enforcement work in the new year to bring all cryptoassets ads into line with our expectations and will form the basis of updated guidance,” said Miles Lockwood, Director of Complaints and Investigations at the ASA.
Crypto assets are also on HM Treasury’s radar with a spokesperson telling City A.M. that the government will set out next steps for regulation following a consultation on the issue.
“We are taking action to protect consumers in response to the development of certain cryptoassets. This includes consulting on proposals to ensure cryptoasset promotions are fair, clear and not misleading and that cryptoassets meet the same high standards expected of other payment methods,” the spokesperson said.
“The Government will set out next steps shortly and, along with the regulators, continues to monitor the situation closely,” they added.
The Bank of England has already begun work with HM Treasury and the Financial Conduct Authority to assess the regulatory approach needed for unbacked crypto assets and their associated markets and activities.
Central bank bigwigs have repeatedly commented on the urgent need for regulation with a December policy paper stating that regulators will “pay close attention to the developments in this area” to “ensure that the UK financial system is resilient to systemic risks that may arise from cryptoassets.”