Tag: UK

UK Regulator Examines AI Impact

by Blockchain News

The UK Competition and Markets Authority (CMA) has announced an examination of the impact of AI on consumers and the economy, with a focus on foundation models. The regulator plans to examine the development and deployment of applications like OpenAI’s ChatGPT against key principles, including safety, transparency, fairness, and accountability. The review will examine the competitive market for AI foundation models and their usage, as regulators aim to monitor how they can expand and present opportunities, along with risks to competition and consumers.

Sarah Cardell, the chief executive of the CMA, highlighted the importance of AI technologies, which have the potential to transform the way businesses compete and drive substantial economic growth. However, she also stressed the need for businesses and consumers in the UK to have access to the potential benefits of AI technologies while being shielded from fake information. AI-generated fakes have already started populating the web, resulting in lawsuits. As such, the CMA aims to help develop AI in ways that ensure open, competitive markets and effective consumer protection.

In addition, the review is intended to produce “guiding principles” for the protection of consumers and support healthy competition as the technologies develop. A report on the findings is scheduled to be published in September 2023, and the announcement follows the publication of a white paper on AI from the UK government in March 2023.

The UK government is committed to ensuring the country is prepared for the opportunities and challenges of AI, with a task force set up to accelerate the country’s AI readiness. The Prime Minister and Technology Secretary revealed funding of 100 million British pounds ($124.8 million) to support the task force on April 25. The task force aims to identify opportunities to use AI to transform industries, create jobs, and increase productivity.

The CMA’s examination of AI reflects the growing importance of the technology and its potential impact on the economy and society. As the use of AI continues to expand, it is important to ensure that it is developed and deployed in ways that are transparent, accountable, and fair, and that protect the interests of consumers and promote healthy competition. With the publication of its findings in September 2023, the CMA’s review will provide valuable insights into the current state of AI in the UK and its potential for the future.

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Google, UK, FTX and Binance in Crypto News

by Blockchain News

In the latest crypto news, Google has expanded its Web3 program by adding 11 blockchain partners to its Google for Startups Cloud Program. The program will provide expertise, grants, and services to emerging Web3 entrepreneurs. The UK government has also allocated $125 million to establish an AI task force aimed at promoting the country’s sovereign capabilities, such as public services, and fostering the adoption of safe and reliable AI foundation models. On the other hand, FTX has agreed to sell its LedgerX futures and options exchange and clearinghouse to M7 Holdings for $50 million, while Binance.US has backed out of its $1 billion Voyager asset purchase due to the “hostile and uncertain regulatory climate in the United States.”

In more detail, Google has partnered with 11 Web3 blockchain firms, such as Alchemy, Polygon, Celo, and Hedera, to expand its Google for Startups Cloud Program. As part of the program, pre-seed Web3 startups can receive up to $2,000 in Google Cloud credits valid for two years, while seeded startups can access $200,000 over two years for Google Cloud and Firebase usage. Additionally, blockchain partners are offering grants of up to $3 million to seeded companies in the program. Nansen, a blockchain analytics company, has also partnered with Google Cloud to provide real-time blockchain data for startups.

Meanwhile, the UK government has launched an AI task force to accelerate the country’s readiness for AI. The task force will focus on promoting sovereign capabilities, such as public services, and fostering the adoption of safe and reliable AI foundation models. The task force aims to launch its first pilots of AI usage and integration targeting public services in the next six months. The UK is committed to becoming a science and technology superpower by 2030 and is pushing for “safe AI” that regulates technology to “keep people safe” without limiting innovation.

In terms of cryptocurrency exchanges, FTX has agreed to sell its LedgerX futures and options exchange and clearinghouse to M7 Holdings for $50 million. The deal is subject to approval from the US Bankruptcy Court for the District of Delaware, which is scheduled to hear the case on May 4. FTX purchased LedgerX in August 2021 to expand its spot trading services, and the sale is part of FTX’s efforts to monetize assets and deliver recoveries to stakeholders.

On the other hand, Binance.US has backed out of its agreement to purchase bankrupt cryptocurrency brokerage Voyager Digital’s assets for $1 billion, citing the “hostile and uncertain regulatory climate in the United States.” The Voyager Official Committee of Unsecured Creditors expressed its disappointment at the news and said it was investigating potential claims against Binance.US. Voyager and the creditors’ committee will now work on distributing cash and crypto to customers directly via the Voyager platform.

In conclusion, the crypto world has seen significant developments this week, from Google expanding its Web3 program to the UK government allocating funding for an AI task force. FTX is set to sell LedgerX, and Binance.US backs out of the Voyager asset purchase. The industry remains dynamic and unpredictable, with companies and governments adapting to the ever-changing regulatory environment.

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UK Considers New DeFi Tax Regime

by Blockchain News

The UK government is seeking to make changes to the tax treatment of lending and borrowing on decentralized finance (DeFi) protocols. HM Revenue and Customs has launched a consultation that will run until June 22, 2023, asking for input from investors, professionals, and firms engaged in DeFi activities, as well as representative bodies and think tanks, on a proposed new DeFi tax regime.

Under the proposed changes, crypto used in DeFi transactions would not be treated as a disposal for tax purposes. This means that Capital Gains Tax (CGT), which is typically triggered when an asset is disposed of, would not apply. Instead, a taxable event would occur when cryptocurrencies are disposed of in a non-DeFi transaction.

The consultation states that a transaction must meet certain criteria to be considered a DeFi transaction. Specifically, it should involve the initial transfer of crypto assets from a lender to a borrower, or through a smart contract, with the borrower being obligated to return the tokens. Additionally, the lender should have the right to withdraw the same amount of tokens that were initially lent or staked.

The proposed changes could have a significant impact on the DeFi ecosystem in the UK. As it stands, many DeFi protocols require users to pay transaction fees, which can be subject to taxes. However, if the proposed changes are implemented, these fees could potentially be exempt from taxation, creating a more favorable environment for DeFi activities in the UK.

The consultation is part of the UK government’s wider efforts to regulate the cryptocurrency industry and ensure that it is operating in a safe and secure manner. With the increasing popularity of DeFi protocols, it is crucial that governments and regulators keep pace with these developments to ensure that they can effectively regulate this rapidly evolving sector.

Overall, the proposed changes to the tax treatment of DeFi transactions in the UK could have a significant impact on the industry. If implemented, they could make the country a more attractive destination for DeFi activities and provide a more favorable regulatory environment for individuals and entities engaged in these activities. It remains to be seen how the consultation process will unfold, but it is clear that the UK government is taking steps to ensure that it can effectively regulate the cryptocurrency industry and support the growth of this innovative sector.

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UK to Invest in AI Task Force

by Blockchain News

The United Kingdom is making significant investments in the development of its technology sector. UK officials recently announced the formation of an AI task force that will receive an initial funding of £100 million to accelerate the country’s readiness for the adoption of artificial intelligence. This task force will prioritize public services and aim to ensure that safe and reliable foundation models for AI use are established.

UK Prime Minister Rishi Sunak expressed his belief in the opportunities that AI presents for economic growth, advancements in healthcare, and security. He stated that by investing in emerging technologies through the task force, the UK can continue to lead the way in developing safe and trustworthy AI and shaping a more innovative economy.

The task force is set to focus on ensuring sovereign capabilities, including public services, and fostering broad adoption of safe and reliable foundation models. The UK has committed to becoming a science and technology superpower by 2030, and this task force’s work will contribute to achieving this goal. The first pilots of AI usage and integration will target public services and are expected to launch in the next six months.

The UK government has already invested £900 million into computing technology, highlighting its commitment to developing its technology sector. Officials in the UK are simultaneously pushing for “safe AI,” which means regulating the technology to keep people safe while promoting innovation.

The country’s science, innovation, and technology secretary, Michelle Donelan, expressed her belief that AI can transform every industry if developed responsibly. She said that this development would ensure that the public and businesses have the trust they need to confidently adopt this technology and realize its benefits fully.

This announcement comes shortly after the UK Treasury announced the revival of its Asset Management Taskforce, which will focus on developing crypto regulation. Coinbase CEO Brian Armstrong will help advise regulators on law and taxation between banks and the fintech industry.

In conclusion, the UK’s investment in the AI task force represents a significant step towards establishing the country as a leader in AI technology. By prioritizing public services and establishing safe and reliable foundation models for AI use, the UK is paving the way for innovation while keeping people safe.

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UK Aims to Implement Crypto Regulation Soon

by Blockchain News

The United Kingdom is looking to establish regulations for digital assets within the next 12 months, according to Andrew Griffith, the economic secretary to the UK Treasury. In an interview with CNBC on April 17, Griffith stated that the country aims to take advantage of the benefits that blockchain technology can bring to the private sector and the overall economy. He added that the UK’s long-term vision is to enable companies to maximize the opportunities presented by crypto assets through effective regulation.

This move towards regulating digital assets reflects the UK government’s recognition of the growing importance of blockchain technology and cryptocurrencies. The implementation of sound crypto regulation will provide greater clarity for businesses and investors operating in the space, reducing the uncertainty and risk associated with digital assets.

The potential benefits of blockchain technology are significant, particularly for industries such as finance, where it can streamline processes, reduce costs, and increase transparency. However, the lack of clear regulation has been a barrier to wider adoption, with many companies reluctant to engage with crypto assets due to the associated risks.

Griffith’s announcement has been met with enthusiasm from the crypto community, with many viewing it as a positive step towards wider adoption of digital assets. It is hoped that this move will lead to increased investment and innovation in the space, further driving the growth of the UK’s digital economy.

The UK is not alone in recognizing the importance of regulating digital assets. Governments around the world are increasingly looking at ways to establish clear guidelines for the use of blockchain and cryptocurrencies. While some countries have taken a more cautious approach to regulation, others, such as Switzerland and Malta, have been more proactive in establishing themselves as cryptocurrency-friendly jurisdictions.

The establishment of digital asset regulation is not without its challenges, however. One of the key issues facing regulators is how to strike a balance between protecting consumers and promoting innovation. Finding the right balance between regulation and innovation will be critical to ensuring the success of the UK’s digital asset industry.

In conclusion, the UK’s move towards regulating digital assets is a positive development for the country’s digital economy. By providing greater clarity and reducing risk, effective regulation will encourage wider adoption of blockchain technology and cryptocurrencies. As the UK works towards establishing its regulatory framework, it will be important to strike a balance between promoting innovation and protecting consumers.

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UK lacks expertise for central bank digital currency

by Blockchain News

The Bank of England (BoE) is unlikely to issue a central bank digital currency (CBDC) anytime soon due to a lack of technical expertise, according to Jon Cunliffe, the deputy governor. Speaking at a treasury select committee hearing, Cunliffe stated that there is a greater than 50% chance that the central bank will eventually issue a CBDC, but the institution is not yet ready to do so.

The UK has been exploring the possibility of a digital pound for several years, but the BoE has been cautious about moving forward with the initiative. The deputy governor explained that the next phase of development will involve partnering with the private sector to test a potential digital pound in a simulated environment. This will help the BoE gain the necessary expertise to build a working prototype and test it in a live environment.

While the BoE has been exploring the potential benefits and risks of a CBDC, the institution has also been monitoring developments in other countries. China, for example, has been working on its own digital currency, the digital yuan, which has already been tested in several pilot programs. The European Central Bank (ECB) has also been exploring the possibility of a digital euro, and has launched a public consultation on the matter.

The BoE is aware that the development of a CBDC would require significant investment in infrastructure and technology, as well as a thorough understanding of the potential risks and benefits. The institution has been consulting with stakeholders in the private sector and academia to ensure that it has access to the necessary expertise.

Cunliffe emphasized that the BoE is committed to exploring the potential of a digital pound, but that the institution is not yet ready to move forward with the development of a CBDC. The next phase of the initiative will be critical in terms of gaining the necessary expertise and testing the technology in a simulated environment. If successful, the BoE may eventually move forward with the development of a working prototype and, eventually, the implementation of a digital pound.

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UK Could Be The Next Crypto-Friendly Nation As Rishi Sunak Becomes Next PM

by Blockchain News

The United Kingdom has appointed Rishi Sunak as its newest Prime Minister after much confusion in the ministerial office over the past months.

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As reported, Rishi Sunak made it the third prime minister in the UK for this year, following the resignation of Liz Truss from the office last week. The newly appointed prime minister has brought a lot of excitement to many crypto enthusiasts as they hope this would mean the UK crypto market could advance more under Sunak’s regime.

 

Rishi Sunak is a former Goldman Sachs analyst who has also served as a chancellor between February 2020 and July 2022. In April this year, Sunak released a proposal aiming to make the U.K a crypto-friendly tech hub. In the proposal, Sunak encouraged the UK’s Royal Mint, the official maker of UK coins, to launch an official NFT collection of the nation – an idea some have criticized as a “poorly judged gimmick.”

 

He also helped the U.K make plans on how the U.K government should regulate stablecoins so as to make them recognized as a legal means of payment in the country.

 

“We want to see the businesses of tomorrow – and the jobs they create – here in the UK, and by regulating effectively, we can give them the confidence they need to think and invest long-term,” said Rishi Sunak.

 

Prior to Sunak’s leadership victory, Liz Truss, who is now the former Prime Minister of the United Kingdom, announced her resignation, 44 days after assuming office on September 6. 

 

As reported by Blockchain.News, Truss’s resignation was fueled by the errors in her proclaimed mini-budget and tax cuts that were announced by the former Finance Minister Kwasi Kwarteng.

 

The policy, at the time, riled the markets, with the stock market recording unprecedented slumps, a trend that also affected the British Pound.

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Revolut Finally Wins FCA Registration to Offer Crypto trading Services in UK

by Blockchain News

Revolut, a London-based digital banking startup, has finally won a long awaiting registration from the U.K.’s Financial Conduct Authority (FCA) to offer crypto services in the United Kingdom.

Revolut becomes the latest accredited crypto asset firm register, bringing the list of companies approved to conduct crypto asset activities in the country to 38.

An FCA spokesperson discussed the development: “We confirm that Revolut has been removed from the temporary register and has received full registration as a crypto asset firm. Revolut has agreed to a number of directions designed to ensure it has the systems and controls to meet the requirements of the money laundering regulations.”

The FCA became the U.K.’s anti-money laundering and counter-terrorism financing authority at the beginning of 2020. As a result, the regulator requested firms conducting certain cryptoasset activities nationwide to register with it.  And so, more than 100 firms, including Revolut, applied for registration.

Although the registration deadline was in March this year, the FCA allowed a select number of firms to remain on the watchdog’s Temporary Registration Regime (TRR), which was introduced to enable firms to continue operating while their applications were being reviewed.

As of early April, Revolut was one of five firms on the Temporary Registration Regime, along with CEX.I0, Copper Technologies, GlobalBlock and Moneybrain. This implied that more than 60 other applications were denied registration or had withdrawn from the official register.

Efforts to Ramp Up Growth Across the World 

This week, Revolut has finally received its approval, while the fate of the other four firms is still unknown. The latest move follows a series of additional regulatory achievements for Revolut around the globe as part of its efforts to launch its services to more customers.

On August 15, Revolut was granted authorization by the Cyprus Securities and Exchange Commission (CYSEC), allowing it to offer crypto services across the European Economic Area (EEA). The EEA includes the 27 nations in the European Union, including Iceland, Liechtenstein and Norway. Therefore, the U.K.’s registration license cemented the winning regulatory approval for the company’s crypto services in Europe.

Early last month, Revolut gained regulatory approval to operate in Singapore. On August 4, the firm launched its crypto services in Singapore.

With the U.K.’s FCA approval, Revolut is now fully authorized to provide crypto services in the United Kingdom. The authorization also has strengthened hopes for the firm to get a U.K. banking license that would enable it to offer its own banking products in its home country.

Revolut, which applied for a U.K. banking license in January 2021, sees getting a U.K. banking license as being a key step in its plan to become a global super app. The firm applied for 48 banking licenses across the globe, but so far, it has received 44 – still awaiting to receive some elsewhere, including in the U.K.

Revolut’s U.K. banking license may be delayed after the Financial Reporting Council (FRC) discovered flaws in its audit by U.K.’s auditing firm BDO.

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Britain to Introduce New Bill to Crack Down on Crypto Crime

by Blockchain News

The U.K. Parliament passed the first readings of a new anti-money laundering bill against cryptocurrencies on Thursday (Sept 23), which aims to give law enforcement agencies greater powers to seize, freeze and recover cryptocurrencies used in criminal activities.

Organised criminals are increasingly using digital currency for fraud, drugs, and the network crime of money laundering.

The Metropolitan Police reported a significant increase in seizures of cryptocurrencies last year. According to the British broadcasting corporation reported in July 2021, police seized more than 114 million pounds and 180 million pounds of encryption related to international money laundering money.

National Crime Agency chief Graeme Biggar said in a statement:

“Domestic and international criminals have for years laundered the proceeds of their crime and corruption by abusing U.K. company structures, and are increasingly using cryptocurrencies.”

The new bill passed its first reading in the House of Commons Thursday and is expected to go to its second reading on October 13.

If passed, the bill would expand powers and capabilities for law enforcement agencies such as the National Crime Agency, giving them the ability to stop illegal activities related to cryptocurrencies and making it easier and faster to seize, freeze and recover cryptocurrency assets.

The bill -“The Economic Crime and Corporate Transparency Bill”, first announced by Prince Charles (now as known as King Charles III) in May in a speech delivered to both houses of the Parliament for the Queen before she passed away, was designed to help regulators impose sanctions on Russia and freeze related assets in the country.

In addition to addressing the cryptocurrency issue, The British Act also aims to prevent the abuse of limited partnerships. The UK government also calls for UK-registered companies to verify their identities and strengthens the UK Companies Registry’s powers to oversee and Cross-check the legitimacy of companies and limit the use of shell companies to launder money.

In May, MONEYVAL is the generic and official name of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and Terrorist Financing, which released a report arguing that cryptocurrencies pose a significant threat to regulators’ efforts to combat money laundering.

The UK’s Financial Conduct Authority (FCA) has warned that a large number of cryptocurrency businesses have failed to meet UK requirements to prevent money laundering.

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UK Requests Crypto Exchanges to Report Suspected Sanction Breaches

by Blockchain News

Cryptocurrency exchanges are now requested to report suspected sanctions breaches to UK authorities under new rules recently introduced amid concerns that cryptos are being used to evade restrictions imposed in response to Russia’s invasion of Ukraine. 

The Guardian media reported the matter on Sunday., citing the updated official guidance of HM Treasury’s Office of Financial Sanctions Implementation (OFSI) on August 30. The regulator explicitly included cryptocurrencies and other valuable digital assets like non-fungible tokens (NFTs) among those that must be frozen if sanctions are imposed on an individual or a company.

The rules set by the regulator now mean that crypto exchanges commit a criminal offence if they fail to report customers designated for sanctions.

Under the latest regulation, crypto exchanges must immediately act if they suspect that one of their clients is under sanctions or if they suspect a breach of sanctions.

The new policy has given such exchanges obligations similar to just the likes of professionals like estate agents, accountants, lawyers, and jewellers.

Financial sanctions on people and firms linked to the regime of Vladimir Putin have been among the UK’s most prominent responses to the Ukraine invasion.

Targets for sanctions have included Russian oligarchs and relatives with direct interests in crypto assets, including Vladimir Potanin, Said Gutseriev, and Oleg Deripaska, among others.

In April, Binance cryptocurrency exchange blocked the accounts of relatives of Russian politicians, including Polina Kovaleva, the stepdaughter of the foreign minister, Sergei Lavrov, Russian Foreign Minister, and Elizaveta Peskova, the daughter of Putin’s spokesperson, Dmitry Peskov.

This came as a response by the western powers led by the US, the UK, and the EU imposing unprecedented financial sanctions on Russia. During that time, fears amounted to Russian companies considering using cryptocurrency for international payments to dodge sanctions.

Using crypto to evade sanctions and move money across the globe was already illegal under UK laws. However, the new changes underline authorities’ concern that the new asset class could be used for evading sanctions because users do not depend on regulated entities to make transactions.

Whether Russia may try using cryptocurrencies to evade sanctions has been an open discussion since March this year. And decentralized finance (DeFi) and decentralized exchanges (DEX) platforms are seen as particularly vulnerable.

Cryptocurrencies have already been used to evade sanctions in Iran and North Korea.

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Bitcoin (BTC) $ 26,793.18 3.18%
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