U. K. Regulator FCA Seeks to Tighten Regulation of Cryptocurrencies

The U.K. Financial Conduct Authority (FCA) said Wednesday that the cryptocurrency market needs tough rules to dissipate conflicts of interest, protect customer assets and "detoxify" the market by overhauling business models to enforce those regulations.

The FCA's new chairman, Ashley Alder, said cryptocurrency regulations should be as tough as the mainstream financial sector's regulation of risky behavior. This year, the U.K. plans to regulate the crypto market under a new financial services law.

Alder said a regulatory regime identical to that of conventional finance would see radical changes in the business model of cryptocurrencies.

In the U.K., 85% of cryptocurrency companies were rejected by the FCA when applying for permission to operate due to they could not comply with even the basic anti-money laundering safeguards.

The FCA also previously worked with police to crack down a number of illegal cryptocurrency ATMs located in London.

“speculative crypto is gambling pure and simple," former FCA Chairman Charles Randell wrote in a letter to the lawmakers. He believes that the cryptocurrencies should be regulated and taxed, with levies to support debt advice and addiction services.

"If the issue and trading of speculative crypto are instead treated as financial services, conferring the 'halo' of financial services regulation, then increased consumer loss and calls for compensation provided by taxpayers or financial services levy payers will inevitably follow," Randell wrote.

The committee asked Alder to respond to the letter.

Source: Reuters