No More `Feeble Warnings' as U.K. Lawmakers Urge Crypto Rules
No More `Feeble Warnings' as U.K. Lawmakers Urge Crypto Rules
(Bloomberg) -- U.K. lawmakers say cryptocurrencies urgently need regulation -- both to protect people from scams, and to position the country as a leader in the sector given its traditional role as a financial hub.
Currencies like Bitcoin and most initial coin offerings are not covered by the U.K.’s Financial Conduct Authority, meaning investors in digital assets are typically not protected and have no opportunity for redress, the British Parliament’s Treasury Committee said in a report published Sept. 19. As a minimum, regulations should be introduced to protect consumers and counter money laundering, it said.
“It’s unsustainable for the government and regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting,” said Nicky Morgan, chair of the committee. “Given the high price volatility, the hacking vulnerability of exchanges and the potential role in money laundering, the Treasury Committee strongly believes that regulation should be introduced.”
Authorities from China to the U.S. are scrutinizing digital assets after years where their explosive growth, subsequent slump and well-publicized hacking incidents captured the attention of the financial and tech communities. The crypto market, valued at $120 billion a year ago, soared to over $800 billion and then crashed back to $200 billion, according to Coinmarketcap.com, which tracks the industry.
“The ambiguity of the U.K. government and regulators’ position is clearly not sustainable,” the report said. Regulation could increase the liquidity of the market and leave Britain well placed to become a global center for digital coins, but the government should evaluate the risks of crypto-assets and assess whether to encourage their growth, the committee said.
--With assistance from Nour Al Ali.
To contact the reporter on this story: Alastair Marsh in London at amarsh25@bloomberg.net
To contact the editors responsible for this story: Elisa Martinuzzi at emartinuzzi@bloomberg.net, Keith Campbell, Jon Menon
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