Great Britain is aiming at regulating cryptocurrency and the DeFi industry as a whole. Regulators have also proposed to remove references to blockchain from the definition of crypto assets, but they have not clarified how, Walter Bloomberg reports.
In addition to crypto assets, decentralized finances are also in the scope of regulation, but DeFi assets are going to be considered on a "case by case basis" instead of one universal regulatory framework.
The main reason for the additional regulation is the lack of information and misleading advertising, which creates risks for customers that are using blockchain-related services and applications.
According to the announcement, consumer risks are also present on the crypto market.
BRITAIN SAYS DECENTRALISED FINANCE (DEFI) MAY BE IN SCOPE OF REGULATION, BUT WILL NEED TO BE CONSIDERED ON A CASE BY CASE BASIS— *Walter Bloomberg (@DeItaone) January 18, 2022
BRITAIN SAYS MISLEADING ADVERTISING AND LACK OF INFORMATION MEANS THERE ARE CONSUMER RISKS PRESENT IN CRYPTO MARKET
It is also not quite clear what regulators mean regarding removing the reference to blockchain from the definition of cryptocurrency assets due to the inseparable nature of the technologies.
Previously, Great Britain's relationship with crypto assets and blockchain was considered a secret, with various businesses accepting cryptocurrencies for payments like the Chai Ada coffee shop in West London.