UK Treasury committee report: regulation is closing in on cryptocurrency

Bitcoin has truly taken off, at a current worth of more than 5,000 euros. Other cryptocurrencies are slowly catching up, but there is one special surprise waiting for investors and exchanges that might hinder their expansion plans. Things are about to get complicated because MPs in the UK want to regulate cryptocurrency, writes The Guardian.

For a while now, governments and institutions operating in the financial services industry have been discussing this aspect, trying to find ways to regulate it on grounds that it is risky and it enables illicit activities such as money laundering.

According to the Treasury committee report consumers are also at risk because cryptocurrency is yet an unregulated “wild-west”-type industry that bypasses banks, so there is no protection from the Financial Conduct Authority should anything happen to their crypto-assets. “Accordingly, investors should be prepared to lose all their money,” the report says.

In response, the FCA “agrees with the committee’s conclusion that bitcoin and similar crypto-assets are ill-suited to retail investors, and as we have warned in the past, investors in this type of crypto-asset should be prepared to lose all their money.”

“Bitcoin and other crypto-assets exist in the wild west industry of crypto-assets. This unregulated industry leaves investors facing numerous risks,” said the committee chair, Conservative MP Nicky Morgan. “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.”

CryptoUK, a trade association that represents companies operating in the digital currency landscape and promotes good conduct in this sector, embraced the report.

“As an industry we have been calling for the introduction of proportionate regulation to improve standards and encourage growth,” said Iqbal Gandham, the chair of CryptoUK. “Self-regulation by the industry was always intended to be a starting point – this must now be matched by government action.”

The committee strongly believes that proper regulation could reduce the number of cyberattacks and could turn cryptocurrency into a business opportunity.

*** This is a Security Bloggers Network syndicated blog from HOTforSecurity authored by Luana Pascu. Read the original post at: https://hotforsecurity.bitdefender.com/blog/uk-treasury-committee-report-regulation-is-closing-in-on-cryptocurrency-20355.html