Talks on controlling the ‘Wild West’ of crypto-asset market
THE GOVERNMENT and the City watchdog are to hold a series of consultations on how best to regulate the ‘Wild West’ of the crypto-asset market.
In response to a report from the influential Treasury Committee, City minister John Glen said that the Government is prepared to give the Financial Conduct Authority (FCA) greater power to oversee the industry.
He said: “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
“Subject to the outcome of this consultation, the Government stands ready to legislate to expand the regulatory perimeter to ensure that FCA regulation can be applied to all crypto-assets that have comparable features to security tokens, regardless of the way they are structured.”
The Treasury Committee report, published in September, on the ‘Wild West’ crypto-asset industry said investors are provided with little protection from risks including volatile prices, hacking and money laundering.
MPs had called for greater regulation of crypto-assets, which at minimum should address protecting consumers and tackling consumer protection and antimoney laundering.
Bitcoin, Ethereum and a whole host of other crypto-currencies have gained rapid popularity in the last few years – and many new crypto-currencies have been launched in the past year through initial coin offerings.
Crypto-assets and some initial coin offerings are not currently regulated by the FCA.
Nicky Morgan MP, chair of the Treasury Committee, 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.”
The Financial Conduct Authority is the conduct regulator for 58,000 financial services firms and financial markets in the UK.
It is also the prudential regulator for more than 18,000 of these firms.