FCA officials say UK parliamentary committee crypto regulation is inevitable

Officials from the United Kingdom’s Financial Conduct Authority (FCA) appeared before the Treasury Committee of the House of Commons on March 8 to discuss the agency’s work. One of the issues raised was cryptocurrency regulation, which officials approached with a clear lack of enthusiasm.

FCA chair Ashley Alder, who took over that position in February after serving as CEO of the Hong Kong Securities and Futures Commission, told the commission that the FCA is “halfway through a pretty ambitious reset” now that the Financial Services and Markets Act has been passed. the Parliament. He and CEO Nikhil Rathi answered questions about predatory lending, mortgage rates and a number of other topics before addressing crypto in the closing minutes of the hearing.

Former FCA Chairman Charles Randell sent a letter to the committee saying, “Speculative crypto is pure and simple gambling and it should be regulated and taxed as such.” Alder responded that “this won’t be viewed from any other regulatory perspective globally than by financial regulators.” Financial regulation “has to be pretty strict,” Alder added.

If the “same risk, same regulation” principle were applied to crypto companies, Alder said:

“The interesting aspect of this is the extent to which crypto would need to adapt and effectively detoxify to fit within that regime.”

When asked if regulation “undeservedly legitimizes” crypto, Alder replied, “I agree,” but said public policy issues such as money laundering cannot be addressed without regulation.

Related: The UK’s FCA explains why it has only given 15% of crypto companies the regulatory nod

The Financial Services and Markets Act, if passed, would give the FCA new regulatory powers over the crypto-currency industry, but would not eliminate the risks associated with cryptocurrency. Rathi said, “We won’t be able to put in place a framework that protects consumers from losses.”

Most UK crypto holders own no more than “several hundred pounds” of cryptocurrency, he added.

The Financial Services and Markets Act was introduced to parliament in July and amended in October to expand regulatory provisions for cryptocurrencies.