UK, U.S. move to control crypto
With a tsunami of scandals deluging the global cryptocurrency/cryptoasset industry and with more likely to come, the UK and US governments are moving, separately, to legislate and regulate what the current British administration calls a “turbulent industry”, and what an unknown number of poorer but wiser investors, at their politest, call a “bunch of bandits”.
Government estimates are that some 10 per cent of British adults own one form of crypto asset or another. The total market capitalisation of cryptocurrencies has collapsed from more than $3 trillion at its height in November 2021 to around $814 billion today, and there are analysts who believe that the sector is now facing an extinction event rather than just a prolonged crypto winter.
According to TelecomTV, it may not be immediately apocalyptic, but some cryptocurrency companies are already going out of business and something needs to be done now to get things on an even keel. Hence the proposed solution to rein in the manifold excesses of the runaway digital currency sector is to go back to the future and apply tried-and-tested regulations that have worked comparatively well (there have been exceptions!) in traditional banking, investment and other financial services for many years. The freebooting crypto days will soon be over as mainstream control is imposed with the application of the strictures and requirements of the UK’s Financial Services and Markets Act 2000.
In a statement, the UK Treasury announced that extending the application of the act to “manage” crypto will, in due course, permit the sector to gain “confidence, credibility and regulatory clarity” in an environment where traditional and “emerging” financial services bear “the same risk [and] same regulatory outcome” under a “fair standards” regime.
Meanwhile, in the US, Congressional legislation of the crypto industry and crypto assets is pending, but whilst the House slowly deliberates, the Securities and Exchange Commission (SEC) is making a determined play to become the de facto lead regulator overall.