FCA officials tell UK parliamentary committee crypto regulation is unavoidable
The CEO and chairman of the United Kingdom’s financial regulator took a grim tone as they discussed crypto regulation but conceded that theyâre the ones who have to do it.
Officials of the United Kingdomâs Financial Conduct Authority (FCA) appeared before the House of Commonsâ Treasury Committee on March 8 to discuss the agencyâs work. Among the issues raised was cryptocurrency regulation, which the officials approached with a clear lack of enthusiasm.
FCA chair Ashley Alder, who took that position in February after serving as CEO of Hong Kongâs Securities and Futures Commission, told the committee that the FCA is âmidway through a quite ambitious resetâ as the Financial Services and Markets bill makes its way through the Parliament. He and CEO Nikhil Rathi answered questions on predatory lending, mortgage rates and a number of other topics before addressing crypto in the final minutes of the hearing.
Former FCA chair Charles Randell sent a letter to the committee saying âspeculative crypto is gambling pure and simple and it should be regulated and taxed as such.â Alder responded that globally âthis is not going to be looked at from a regulatory perspective other than by financial regulators.â Financial regulation âneeds to be appropriately tough,â Alder added.
If the principle of âsame risk, same regulationâ were applied to crypto businesses, Alder said:
âThe interesting aspect to this is the degree to which crypto would need to adapt and effectively detoxify in order to fit within that regime.â
When asked if regulation âundeservedly legitimizesâ crypto, Alder responded, âI agree,â but said public policy issues such as money laundering cannot be tackled without regulation.
Related: UKâs FCA hints at why itâs only given 15% of crypto firms the regulatory nod
The Financial Services and Markets Act, when passed, would give the FCA new regulatory powers over the crypto currency industry, but not eliminate the risks posed by cryptocurrency. Rathi said, âWe are not going to be able to put in place a framework that protects consumers from losses.â
On Wednesday, weâll be scrutinising the work of @TheFCA. Weâll hear from Chief Executive Nikhil Rathi and Chair Ashley Alder.
Find out more about the session https://t.co/jcmn1lrQJv pic.twitter.com/AA1Fv7prE9
â Treasury Committee (@CommonsTreasury) March 3, 2023
Most British crypto holders own no more than âseveral hundred poundsââ worth of cryptocurrency, he added.
The Financial Services and Markets Act was introduced into Parliament in July and amended in October to expand crypto regulatory provisions.