UK government backs more cryptocurrencies regulation following “Wild West” claims

The British government says that it is prepared to bestow full cryptocurrency regulation rights on to the Financial Conduct Authority (FCA) after a group of Members of Parliament claimed that the cryptocurrency sphere looked like the “Wild West” in terms of consumer protection.

In a report from the Treasury Select Committee, MPs claimed that “problems include volatile prices, hacking vulnerabilities, minimal consumer protection, and anonymity aiding money laundering” all existed.

At the moment, only a handful of blockchain-related cryptocurrencies are overseen by the FCA. Bitcoin, as well as some other high profile ones, are not.

Regulation, the report claimed, could have a real positive impact for investors. Under the plans, traders who feel they have been subject to crypto fraud would find it easier to have their problems solved through a centralised system with a clear pathway.

“Regulation could improve customer outcomes, enable sustainable growth, and reduce certain risks”, it said.

“In deciding the regulatory approach, Government should decide if growth should be encouraged. Proportionate regulation could see UK as well placed to become [a] global centre for crypto-assets”, it added.

It pointed out that there was currently a lack of widespread understanding as to who was responsible for regulating what in the crypto sector – and that this could not last.

“The ambiguity of the UK Government and regulators’ position is clearly not sustainable”, it said.

However, the report did look at some positives. It touched, for example, on the role of blockchain mines, and attempted to see some positive potential value.

“Blockchain is currently slow, costly and energy-intensive, but there is potential for data storage uses”, it wrote.

The Treasury Select Committee is made up of a group of MPs drawn from various political parties.

Its role is to oversee the policy, spending and overall running of various finance-related government organisations, such as the FCA.

According to Nicky Morgan, who is Chair of the committee, there was broad agreement between the government, the FCA and the committee on how to proceed.

“The Treasury Committee would like to thank the Economic Secretary and Chief Executive of the FCA for providing evidence to the Committee’s inquiry, and for taking the time to respond to the report”, Morgan said.

“It is clear that the Government and the FCA share the Committee’s concerns on crypto-assets, including the lack of regulation, minimal consumer protection, and anonymity aiding money laundering.”

“The decision by the Government and the FCA to hold a series of consultations about how to mitigate these risks is welcome. The Committee will keep a close eye on these consultations and will continue to press for regulation”, she added.

In response, Government Minister John Glen, Minister for the City and the Economic Secretary to the Treasury, said that a government consultation was now on the way.

“The government will consult early next year to explore whether other crypto-assets that have comparable features to specified investments but that fall outside the current perimeter should be captured in regulation”, he said.

Nigel Frith

Share

Tweet

Safest Forex Brokers 2023

	Broker	Info	Best In	Customer Satisfaction Score
#1	72% of retail CFD accounts lose money. Founded: 2014	Global Forex & CFD Broker	Best Trading Conditions Visit broker	4.9
#2	Your capital is at risk Founded: 2014	Global Forex Broker	BEST SPREADS Visit broker	4.8
#3	Your capital is at risk Founded: 2006	Globally regulated broker	BEST CUSTOMER SUPPORT Visit broker	4.9
#4	82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Founded: 2008	Global CFD Provider	Best Trading App Visit broker	5
#5	Between 74-89 % of retail investor accounts lose money when trading CFDs Founded: 2010	Global Forex Broker	Low minimum deposit Visit broker	4.9
#6	77% of CFD traders lose Founded: 2007	Global CFD & FX Broker	ALL-INCLUSIVE TRADING PLATFORM Visit broker	4.9
#7	Your capital is at risk Founded: 2009, 2015 and 2017	Global Forex Broker	Low minimum deposit Visit broker	5
#8	Your capital is at risk Founded: 2006	CFD and Cryptocurrency Broker	CFD and Cryptocurrency Visit broker	5

Forex Fraud Certified Brokers

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.