British cryptocurrency platforms are calling on a group of influential MPs today to support proposals to regulate the industry in the UK.
CryptoUK, a self-regulated trade body of seven exchanges, is working to make the cryptocurrency sector more legitimate and transparent.
The group set out the plans as part of a written response to the Treasury Select Committee's inquiry into digital currencies today.
MPs are currently examining the role of digital currencies in the UK, including the risks the pose to consumers, business and the government.
Regulators across the world are looking into cryptocurrencies over fears they are being used criminally. The EU's top law enforcement agency has said money laundering taking place via the unregulated digital cash could amount to as much as £4bn.
CryptoUK said regulation should focus on exchanges, brokers and trading platforms rather than the cryptocurrencies themselves, and said HM Treasury should grant the Financial Conduct Authority (FCA) new permissions to govern crypto investment.
The group wants the FCA to issue crypto-licences to approved platforms and enforce new requirements, including appropriateness checks on investors, anti-money laundering rules and operational standards.
Iqbal Gandham, the chair of CryptoUK and UK managing director at trading platform eToro, said: “Introducing a requirement for the FCA to regulate the 'on-off' ramps between crypto and fiat currencies is well within the remit of HM Treasury. Based on our analysis, this could be achieved relatively easily, without the need for primary legislation, and would have a huge impact, both in reducing consumer risk and improving industry standards.
“This is an approach which is already working well in other countries, who are now taking the lead over the UK, for example in Japan and Gibraltar."
Gandham said: “This is a wonderful opportunity for government to take a proactive stance, putting action where there are positive words and reinforcing the UKs role as the worlds financial capital."
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