CryptoUK Urges Govt to Back Market Regulations
The proposed legislation includes issuing of "crypto licenses"
CryptoUK, a self-regulatory trade body for the British cryptocurrency industry, has called on a group of influential Members of Parliament (MPs) to support proposed rules governing the trading of virtual currencies, news outlet City A.M. reported on Tuesday.
The association set out its proposals in a letter to the Treasury Select Committee's inquiry into cryptocurrencies. The inquiry, which was launched in February and is currently underway in Parliament, intends to examine the role of digital assets in the UK, including the risks they pose to consumers, businesses and the government.
CryptoUK has reportedly proposed that regulation in the crypto space should focus on the platforms that facilitate the interaction between cryptocurrencies and fiat – exchanges, brokers and trading platforms – rather than on the assets themselves. The group has also urged MPs to make cryptocurrency investment a regulated activity under the Financial Conduct Authority (FCA). In addition, CryptoUK has proposed issuing of “crypto licenses” to the platforms which comply with know your customer (KYC) and anti-money laundering (AML) standards.
Iqbal Gandham, the chair of CryptoUK and UK managing director at digital assets exchange eToro, said, as quoted by City A.M.: “Introducing a requirement for the FCA to regulate the 'on-off' ramps between crypto and fiat currencies is well within the remit of HM Treasury. Based on our analysis, this could be achieved relatively easily, without the need for primary legislation, and would have a huge impact, both in reducing consumer risk and improving industry standards.”
Gandham further cited examples of countries such as Japan and Gibraltar where the governing approach has worked well and outlined the importance of taking a proactive stance in the UK: “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.”
This latest drive for greater legitimacy comes at a time of growing regulatory scrutiny of the crypto industry in Europe. Earlier this month, the EU Parliament voted to improve regulation of digital currencies in an effort to curb money laundering and other criminal activity in the sector.
If the proposed legislative approach is adopted, the move would resemble the way regulation emerged in the UK Peer-to-Peer (P2P) sector when major platforms including Zopa, Funding Circle and RateSetter formed self-regulatory body, the Peer-to-Peer Finance Association, in 2011 and pushed for FCA regulation, which was first announced in 2014.
A growing number of self-regulatory bodies have formed across the blockchain industry as a way to educate their respective governments and collaborate on regulation and lawmaking. Crypto firms in India, Croatia, Slovenia, and Japan have recently joined forces to improve the crypto trading environment.
CryptoUK was launched in February this year. The association is made up of seven large crypto trading platforms — Coinbase, eToro, CryptoCompare, CEX.IO, BlockEx, CoinShares and CommerceBlock.