The Financial Conduct Authority (FCA), the government body responsible for regulation of financial services companies in The United Kingdom, has come under fire from the UK business Authority in a new report.
The director of the British Business Federation Authority (BBFA), Patrick Curry, has suggested that MPs’ plans to force the FCA to crack down on illegal activity is unnecessarily punitive and could ultimately damage the UK’s standing as a fintech hub. Curry maintains that it is still far too early to take such an approach given that blockchain is making important inroads towards improving business and the way the way that companies operate:
“It is a very blunt instrument approach and I haven’t seen this in other countries. The use of this technology is still a voyage of discovery and these technologies are being refined for different types of use. My concern is the law of unintended consequences.”
The report’s co-authors, the BBFA, law firm Baker Botts, Novum Insights and crypto exchange TodayQ, argue that “bad regulation is worse than no regulation at all”.
Neil Foster, the corporate technology partner at Baker Botts, said that proposed legislation is too all-embracing and needs far more sophistication, suggesting that crypto assets need their own discrete set of legislative guidelines. He argued:
“With sophisticated classification, we should work out what could be a regulated activity. If you crowbar everything into the Regulated Activities Order you are making everything into an investment bank.”
A recent report published by the United Kingdom Treasury Committee has called for the “Wild West” crypto-asset market to be regulated. Summarily, the report acknowledged that cryptocurrencies and “most” initial coin offerings (ICOs) did not fall within the remit of the FCA who, in August, established an international regulatory network for financial innovations.
The UK’s daily broadsheet, the Telegraph, has reported that the Conservative government is still dragging its heels regarding the regulation of cryptocurrency, despite London becoming one of Europe’s main crypto hubs and the home to some of the industries biggest players.
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