UK lawmakers are calling for regulating the crypto 'wild west' while insisting that regulation could help make the UK a 'global centre for crypto assets'.
In a British Parliament's Treasury Committee report published Wednesday, lawmakers stated that investors "are afforded very little protection" from numerous risks and no formal recourse for consumer compensation. The committee added that it was no longer sustainable for the government to issue "feeble warnings" without action. They argue that consumer protection and anti-money laundering actions are the minimal measures required.
“Bitcoin and other crypto-assets exist in the Wild West industry of crypto-assets. This unregulated industry leaves investors facing numerous risks,” said Nicky Morgan, Treasury Committee chair. “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.”
“It’s unsustainable for the Government and regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting…At a minimum, regulation should address consumer protection and anti-money laundering.”
The Treasury Committee has urged the government to evaluate cryptocurrency sector risks and whether growth in the crypto industry should be encouraged.
Of note, the Treasury Committee did say that regulation could lead to increased liquidity in cryptocurrency markets.
Nicky Morgan added:
“If the government decides that crypto-asset growth should be encouraged, appropriate and proportionate regulation could see the UK become a global centre for this activity.”
The UK has been urged to take a second look at their hands-off approach by Ripple Labs. Ryan Zagone, head of Ripple's regulatory relations, called for UK regulators to end the 'Wild West' of cryptocurrency markets, urging the UK to take their cues from nations such as Japan where exchanges are regulated and cryptocurrencies, such as Bitcoin, are seen as legal tender.
Since then the UK has launched a cryptocurrency task force with the Bank of England, Her Majesty's Treasury, and the Financial Conduct Authority to understand the risk and benefits related to the cryptocurrency sector.