UK cryptocurrency bodys call for regulation

CryptoUK, the first self-regulatory trade association for the UK cryptocurrency industry, has called for regulation in the industry.

CryptoUK, which was set up earlier this year, has set out new plans for HM Treasury to make cryptocurrency investment a regulated activity under the Financial Conduct Authority (FCA).

The proposals include HMT replicating peer-to-peer finance legislation to bring cryptocurrency platforms under the FCA’s remit and ‘Crypto-licences’ issued to platforms which implement approved KYC and AML standards. The plans are part of a written response by CryptoUK to the House of Commons Treasury Select Committee inquiry into digital currencies, which is currently underway in Parliament.

Iqbal Gandham, chair of CryptoUK, said: “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.

“This is an approach which is already working well in other countries, who are now taking the lead over the UK, for example in Japan and Gibraltar. We hope that the Treasury Select Committee considers these and adopts the ideas when it puts forward its own recommendations to the Treasury”.

The group says that new rules should be applied to exchanges, brokers and trading platforms that facilitate the interaction between digital currencies and fiat money, and not on the currencies themselves.

CryptoUK said wants the HM Treasury to grant the FCA new permissions to govern crypto investment, which can be delivered without the need for Primary Legislation. The trade body also said that the FCA should issue Crypto-Licenses to approved platforms and enforce new requirements including appropriateness checks on investors, anti-money laundering rules and operational standards.

In February, seven cryptocurrency companies formed CryptoUK, which looks to promote the development and recognition of digital currency technologies in the UK. CryptoUK comprises seven founding members including trading platforms, exchanges, comparison sites, intermediaries, merchants and asset managers. These are: BlockEx; CEX.IO; Coinbase; CoinShares; CommerceBlock; CryptoCompare; and eToro.