Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the risks to investors following the collapse of the cryptocurrency exchange FTX.

Recent events in cryptoasset markets – including the collapse of FTX – have highlighted the importance of establishing regulation which supports safe innovation and protects consumers and stability. The FCA and Bank of England have warned that cryptoassets are high risk, and that investors should be prepared to lose all of their money.

In January 2022 the government published a response to a consultation on a proposal to bring certain cryptoassets into the scope of financial promotions regulation. The forthcoming legislation on cryptoasset financial promotions, resulting from the consultation, and supporting FCA rules, will regulate in-scope cryptoasset financial promotions, requiring them to be fair, clear and not misleading. This is aimed at improving consumers’ understanding of the risks and benefits associated with cryptoasset purchases and ensuring that cryptoasset promotions are held to the same standards as similar risk financial services products. The government will also consult on its approach to regulating wider cryptoasset activities in the coming weeks.

The government will continue to closely monitor the wider cryptoasset market and will stand ready to take further regulatory action if required.