Britain’s cryptocurrency industry is urging the government to step in to rid the sector of crooks and fraudsters.
CryptoUK, a self-regulating body set-up by leading players in the industry earlier this year, wants consumer watchdog the Financial Conduct Authority (FCA) to police the sector to protect consumers.
The plea has gone to influential MPs on Parliament’s Treasury Select Committee.
The committee is investigating how cryptocurrency and blockchain technology would work in the UK and if they pose any risk to consumers, business or the economy.
CryptoUK suggests the government should take control of platforms that deal between cryptocurrencies and main currencies, such as the pound, euro and US dollar.
The targets would be exchanges, brokers and other trading platforms rather than regulating cryptocurrencies directly.
Crypto licences for platforms
The body recommends the FCA should do this by issuing ‘crypto-licences’ to give consumers and businesses confidence that platforms have been carried out to safeguard their money.
“This is an approach which is already working well in several other countries, which are now taking the lead over the UK in cryptocurrencies, for example in Japan and Gibraltar,” said Iqbal Gandham, the chairman of CryptoUK.
“This is a wonderful opportunity for government to take a proactive stance, putting action where there are positive words and reinforcing the UK’s role as the world’s financial capital.
“We hope that the Treasury Select Committee considers these comments and adopts the ideas when it puts forward its own recommendations to the Treasury.”
CryptoUK hopes the moves would bolster the cryptocurrency sector by improving standards across the industry and cutting the risk of losing money for consumers.
New laws not needed
Gandham argues that The Treasury can give the FCA the go-ahead to introduce cryptocurrency regulation with existing powers rather than drafting new legislation.
The move by CryptoUK follows similar action in other countries where self-regulating bodies call for government intervention, sometimes to legitimise their position in the market.
The select committee inquiry is looking at how the FCA and Bank of England can regulate cryptocurrencies without ‘stifling innovation’ in the sector with too many rules.
Founding members of the body include BlockEx, CEX.IO, Coinbase, CoinShares, CommerceBlock, CryptoCompare, and eToro.