A UK parliamentary committee has published a report calling for the regulation of cryptocurrencies.
Comparing the current environment to the rough and lawless frontier period when Europeans first colonised the western United States, MPs said investors were vulnerable to hacking and volatile prices.
According to most custom blockchain development services, blockchain, which underpins the crypto system, aided money laundering and had minimal consumer protections, the report concludes.
Among key findings, the committee said the UK regulator’s “ambiguous position is clearly not sustainable”.
Crypto-assets, including most initial coin offerings (ICOs), are currently not within the scope of Financial Conduct Authority (FCA) regulation.
At present, crypto-asset investors are afforded very little protection from the litany of risks, namely there are no formal mechanisms for consumer redress, nor compensation. Crypto voluntary codes of conduct and best practice are ignored, the report found.
Feeble FCA bumbling along
Nicky Morgan MP, chair of the Treasury Committee, 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.
“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. 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.”