UK Treasury Committee: Cryptocurrencies Are Crypto-Assets and Should be Regulated
That crypto investors are exposed to a litany of risks in a largely unregulated and developing sphere is true. It is along the same line of consumer protection that the UK’s Treasury Committee is rallying from calling for immediate regulation of the sphere by the Financial Conduct Authority, the country’s markets watch dog.
At the moment, the FCA has no powers to execute decisively on matters stemming from crypto token issuance or trading. Nonetheless, they have been actively facilitating safe trading of these assets. Recently, as reported by NewsBTC, the regulator issued CoinBase UK with the first e-money license effectively allowing them to dispense better services for their customers while at the same time adhering to laid out operational standards just like any other regulated financial entity within the UK.
Surprisingly, the UK isn’t the only jurisdiction facing challenges on better understanding cryptocurrencies. Approach from governments vary from outright excitement, indifference and suspicion with the majority banning exchanges and cryptocurrencies altogether.
Investor Protection is Priority
Needless to say, members of the Treasury Committee are worried that investor protection shouldn’t be taken lightly. This is so because there were no clear “routes of consumer redress or compensation”. Most notably though is the committee emphasis that the boom and bust within the crypto space proliferated by initial coin offerings is a risk for consumer investors. This has been worsened by inaction from governments as regulators “bubble’ with definitions.
While expressing his dissatisfaction, BBC quoted Treasury Committee chair Nick Morgan saying:
“It’s unsustainable for the government and regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting. At a minimum, regulation should address consumer protection and anti-money-laundering.”
UK’s Crypto Regulatory Status
It’s understandable that the committee have their reservation on cryptocurrencies. Though they are not a risk to the economy as Mark Carney earlier stated, the fact that the market is shaky and characterized by wild swings. Overly, this is undesirable for novice investors attracted by the profit clout thanks to last year’s price explosions. The markets have since corrected slashing the overall cryptocurrency market capitalization by more than 75 percent.
Complementing the Treasury Committee calls is the chair of CryptoUK, the crypto-self regulatory body, Iqbal Gandham. CryptoUK was formed early this year. The body has been in the forefront agitating for better industry self-regulation.
It should be noted that this is not the first time the UK has insisted on regulating cryptocurrencies. Earlier this year, Prime Minister and Philip Hammond, chancellor of the Exchequer acknowledged that even if cryptocurrencies would be structurally important to the economy, the risks involved were too much for the UK to turn a blind eye on.
Image from Shutterstock
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