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CryptoUK, the first self-regulatory trade association for the UK cryptocurrency industry, has announced that it has called on a group of influential MPs to support proposals to regulate the industry in the UK.
CryptoUK, the self-regulatory body set up to represent the sector, has set out new plans for HM Treasury to make cryptocurrency investment a regulated activity under the Financial Conduct Authority (FCA).
The CryptoUK proposals include HMT replicating peer-to-peer finance legislation to bring cryptocurrency platforms under the FCA’s remit. Under the proposals, “Crypto-licences” could be 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.
At a time when ministers are actively considering how to approach cryptocurrency regulation in the UK, ahead of implementing new EU anti-money laundering regulation, the inquiry will be significant in influencing their approach.
CryptoUK’s blueprint includes:
- Regulation should focus on those platforms that are facilitating the interaction between digital currencies and fiat – exchanges, brokers and trading platforms – not on the currencies themselves.
- HM Treasury should use powers to grant the FCA new permissions to govern crypto investment – this can be delivered without the need for Primary Legislation.
- FCA should issue Crypto-Licenses to approved platforms and enforce new requirements including appropriateness checks on investors, anti-money laundering rules and operational standards.
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.
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.
We hope that the Treasury Select Committee considers these and adopts the ideas when it puts forward its own recommendations to the Treasury.