By Esmée Hardwick-Slack
Bitcoin and other digital currencies are a “wild west” industry according to a report by MPs on the Treasury select committee.
They have stated that consumers were left unprotected from an unregulated industry that aided money laundering, while the government and regulators “bumble along” and fail to take action.
Conservative MP Nicky Morgan, chair of the committee, has said “Bitcoin and other crypto-assets exist in the wild west industry of crypto-assets. This unregulated industry leaves investors facing numerous risks. 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.”
The report urges that regulation should be introduced to add minimal consumer protection and combat money laundering. At present, the Financial Conduct Authority (FCA) has no power to regulate either the issuer of these assets or the exchanges on which they are traded.
Iqbal Gandham, Chairman of CryptoUK, a self-regulatory body for the crypto-currency industry, has said it welcomes the report.
“Self-regulation by the industry was always intended to be a starting point – this must now be matched by government action. Regulatory oversight is essential to ensuring consumer safety, guarding against malpractice and providing much needed clarity to an industry that is fast maturing.
“It is therefore pleasing that the committee has endorsed our suggestion on how this can be delivered, by bringing responsibility within the FCA’s perimeter of oversight.”
The digital currency emerged after the financial crisis, allowing people to bypass banks and usual payment processes to pay for goods and services. There are currently more than 1,500 varieties of crypto-asset being traded on around 190 exchanges around the world. In 2017, the price of a bitcoin soared by over 900%, hitting a peak of almost $20,000 in December before losing two-thirds of its value in just a few months.
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