Executives at Wealthify, Nutmeg, and Scalable Capital have called on the UK’s Financial Conduct Authority (FCA) to take a tighter stance on cryptocurrency regulations, warning that unsuspecting crypto users are at risk of losing their money.
While wealth managers are currently closely regulated by the FCA, cryptocurrencies remain virtually untouched by the regulator.
”The FCA is Way Too Slow”
“The FCA is way too slow,” said Richard Theo, Wealthify CEO and founder, in a report by the Financial News. “[As a regulated firm] there are a lot of tests we have to do before we can take on a client. But that same client can go and buy bitcoin with no questions asked. There are far more risks involved when investing in Bitcoin. The FCA should get on to it fast.”
Founder and CEO of Scalable Capital, Simon Miller, echoed Theo’s statements: “People see the explosion of digital currencies and say ‘I can make a lot of money quickly.’ But that’s not investing — that’s gambling. It needs to be looked at.” He also noted that extensive media coverage of cryptocurrencies might have contributed to the crypto craze, saying that news coverage of traditional asset classes is “not as sexy.”
Indeed, head of exchange-traded fund research at Nutmeg James McManus said that “With cryptocurrencies gaining media attention for large gains but little to no attention for large losses, perhaps now is the time for regulators to take a closer look at the selling process around cryptocurrencies.”
The three men denied that their concern stemmed from the fact that they may be losing customers to cryptocurrency.
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Crypto Industry Insiders Want More Regulation, Too
Call for UK regulators to ramp up their efforts hasn’t only come from outside the cryptocurrency industry. Ryan Zagone, head of Ripple’s regulatory relations, said in a Telegraph report earlier this year that the industry is “at that time now where [it needs] more clarity and rules and (…) more certainty.”
“It’s a good time to start revisiting that ‘wait and see’ approach taken by regulators,” he added.
Greatly appreciate the invitation and opportunity to brief @UKParliament @CommonsTreasury on digital currencies. Excellent questions and well informed views from Members. See the full video: https://t.co/82A9Jmqwop
— Ryan Zagone (@RyanZagone) May 2, 2018
Similarly, a self-regulatory body for the blockchain industry known as CryptoUK was created to work hand-in-hand with UK regulators. Chairman Iqbal Gandham described the organization as a body “which the masses and the wider audience in the UK would understand in terms of what crypto is, how we want to regulate it, and what the best practices that we as organizations choose to follow.”
So far, no drastic has been taken to regulate cryptocurrencies within the UK.