The United Kingdom has an opportunity to capitalize on the departure of Web3 firms from the United States due to regulatory uncertainty. To achieve this, the U.K. must create its own regulatory path, smoothing the requirements for crypto in some regard. A recent report from the influential conservative think tank Policy Exchange has proposed 10 proposals for the U.K. government to improve Web3 regulation. One of the proposals is limiting the liabilities of individuals who hold tokens in a decentralized autonomous organization (DAO). The report cites a negative example of a recent ruling in the U.S. that makes any individual American who owns or previously owned tokens in a DAO liable for any violations of the law the DAO commits. The report also suggests the Financial Conduct Authority (FCA) loosens its current Know Your Customer (KYC) approach, allowing for the use of “alternative and innovative techniques” such as digital identities and blockchain analytics tools. The experts say the U.K. should avoid undermining self-hosted wallets and regulating proof-of-stake services as a financial service. Other proposals include allowing private stablecoin issuers to place stablecoin reserves in the Bank of England, creating a “tax wrapper” for the crypto exchange and creating a new sandbox under the Department for Science, Innovation and Technology. Recently, U.K. regulators have taken a more stringent approach to the digital assets industry. His Majesty’s Treasury is considering banning all cold calls promoting crypto investments, and the FCA has warned local crypto businesses to follow its marketing rules or face consequences.

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Information	Details
Geography	Europe
Countries	🇬🇧 🇺🇸
Sentiment	neutral
Relevance Score	8
People	None
Companies	Financial Conduct Authority (FCA), His Majesty’s Treasury, Innovation and Technology, Bank of England, Policy Exchange, Department for Science
Currencies	None
Securities	None