The United Kingdom Treasury Committee has urged the Financial Conduct Authority (FCA), to regulate bitcoin, initial coin offerings, and its entire cryptoverse, to protect investors from bad actors and curb money laundering operations, according to a BBC report on September 19, 2018.
Crypto-assets Not Cryptocurrencies
While distributed ledger technology (DLT) and digital currencies have excellent potentials to make the world a better place if well utilized, most regulators are yet to formulate amenable rules that would protect investors and deter cryptocriminals from leveraging the seemingly unregulated nature of the cryptoverse to perpetrate crimes.
Now, a UK committee of MPs have urged regulators to come up with laws to protect consumers against the numerous adverse effects of investing in digital currencies, including price volatility, heists and others.
The committee argued that there are no perfect digital currencies at present and they should be called “crypto-assets” and not cryptocurrencies and must, therefore, be supervised by the Financial Conduct Authority (FCA).
Unlike in the United States where the Securities and Exchange Commission (SEC) has control over cryptocurrency exchanges, ICO organizers and bitcoin-linked businesses, regulating cryptos is not in the jurisdiction of the FCA.
The committee also pointed out that there are currently no measures put in place to protect investors or offer a form of compensation or redress when they lose their funds.
“As the government and regulators decide whether the current Wild West situation is allowed to continue, or whether they are going to introduce regulation, consumers remain unprotected,” said the Treasury Committee.
Of a truth, the original vision of Satoshi Nakamoto was to create an entirely decentralized monetary system that is devoid of any form of interference from the government; however, the activities of bad actors have made it necessary for some sort of guidelines to be put in place to protect investors.
According to a Diar report, since 2017 to date, ICO exit scams have carted away nearly $100 million in investors’ funds.
South Korea, a crypto-friendly region have since banned anonymous bitcoin trading and has made it compulsory for cryptocurrency trading platforms to conduct proper know-your-customer (KYC) and anti-money-laundering (AML) procedures.
CryptoUK, a self-regulatory body for the UK’s virtual currency ecosystem has commended the Treasury Committee’s stance over regulating the cryptospace.
The body noted that regulatory oversight would bring more clarity and support the growth of the industry.