A panel of UK lawmakers in a recent report said that ether, and other crypto currencies, should be regulated to prevent fraudsters from using them and posing significant risks to the consumer. Britain is working on its first cryptoassets rules, as the current ones only adhere to anti-money laundering measures.
Bitcoin and ether account for more than two thirds of all cryptoassets. They are not backed up by any currency or other asset and this can lead to price volatility and even the loss of money invested. Regulating retail trading and investment of unbacked cryptocurrency could create a “halo” effect, leading consumers to believe that the activity is more secure than it actually is or protected, when it’s not.
“We therefore strongly recommend that the Government regulates retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service, consistent with its stated principle of ‘same risk, same regulatory outcome’,” The report stated.
The government has warned that consumers could lose their entire investment in cryptocurrency. The total market capitalisation for crypto firms is about $1.2 trillion globally. It’s a tiny fraction of the system but the collapse last year of FTX Exchange has made it more urgent to regulate this sector.
“The events of 2022 have highlighted the risks posed to consumers by the cryptoasset industry, large parts of which remain a wild west,” The following are some of the ways to get in touch with each other Harriett BaldwinChair of the Treasury Committee.
Around 10% of UK adult adults own or have owned cryptoassets. On September 25, the World’s First Comprehensive Rules for Crypto Markets were approved by the European Union. International regulators will soon propose global standards.
The report stated that the technology used to create cryptoassets could improve the efficiency of payments.
Reporting By: Huw Jones
Editing By: Christina Fincher
Our Standards: The Thomson Reuters Trust Principles.
