The United Kingdom’s government has detailed what it calls “robust” plans to regulate the crypto industry, with new rules surrounding trading platforms, market abuse, lending and tokens.

The government said it intends to bring all those activities “within the regulatory perimeter for financial services,” according to a press release, with the intent of better protecting consumers and businesses working with cryptocurrencies and other crypto-related assets.

The proposal for regulation comes after a tumultuous year for the crypto industry after multiple failures caused crypto markets and businesses to collapse during what was dubbed “crypto winter.” They included the crash of the TerraUSD “algorithmic” stablecoin in May, which led to multiple bankruptcies including the Three Arrows Capital hedge fund and crypto lenders and brokers Voyager Digital and Celsius Network.

The dramatic collapse and bankruptcy of FTX in November further bruised the industry, leading to even further bankruptcies and more market turmoil.

With all this in mind, the new rules and regulations aim to bring the crypto industry into line with current traditional financial regulations by bringing it under the same umbrella as the existing rules laid out in the Financial Services and Markets Act, which was passed in 2000, the proposal said.

The objective is to create a clear regulatory framework to allow businesses to innovate but still maintain financial stability based on already existing laws and regulations that have proven to work. This would mean applying rules and regulations to centralized trading services, such as those similar to FTX, into traditional financial regulations for the first time.

“We remain steadfast in our commitment to grow the economy and enable technological change and innovation – and this includes cryptoasset technology,” said Andrew Griffith, economic secretary to the U.K. Treasury. “But we must also protect consumers who are embracing this new technology — ensuring robust, transparent, and fair standards.”

For trading platforms, the regulatory plans seek to enhance consumer protections to prevent what happened with the collapse of FTX and others. For example, they are required to show that they have the necessary assets on hand to show that they can cover customer transactions, as well as require proper bookkeeping records and restrict commingling investors’ assets with the firm’s own assets. The rules also call for strengthening data reporting for what the regulators call “market abuse monitoring” and submitting suspicious activity reports, for example, on anti-money-laundering regulations.

Market abuse is defined as anything from insider trading or other market manipulation that might be unlawful in the U.K., such as “pump and dump” schemes. As a result, trading firms would be tasked with monitoring and reporting potential risks when it comes to market manipulation in the same way that traditional markets are.

According to the proposed rules, crypto exchanges intending to do business in the U.K. would need to be authorized by regulators before they could operate. Crypto custodial services, or those that store and protect cryptocurrencies and assets from theft, would also be subject to these new rules.

Today begins a consultation period that will close on April 30, after which the U.K. government will take feedback on the proposal from crypto firms, traders and other stakeholders into consideration and make a response.

These plans follow a lot of regulatory stirring across the European Union, especially during 2022, which in July furnished a provisional agreement on crypto regulations that sought to tame the “Wild West” of the volatile crypto markets.

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