Yesterday the UK’s Financial Conduct Authority (FCA) released a final report describing the way UK regulators should approach cryptoassets and blockchain technologies in the coming months. The report includes the FCA’s definitions of the different types of cryptocurrencies and the blockchain technologies that make them possible.
The UK repeatedly scolds the cryptocurrency industry in their report and holds the popular EU view that cryptocurrencies contain “no intrinsic value”. Not only that, the FCA states that cryptocurrency creates risks including “harm to consumers and market integrity, the use of cryptoassets for illicit activities and potential future threats to financial stability.”
So what does the UK plan to do to protect the crown?
The Bank of England and the FCA have plans to mitigate the cryptocurrency market with the creation of new laws and regulations surrounding the market. The consultation process for the creation of the new laws and regulations is currently in process and is set to be completed in early 2019. It is possible, and probable, that the new laws with ban certain cryptocurrencies, contracts, and other blockchain application technologies.
So what’s going to happen to investors? The FCA states…
“investors should therefore be prepared to lose all the value they have put in.”
Included in the proposed and promised regulations are further restrictions of wallets, exchanges, strict and non-optional know-your-customer and anti money-laundering service checks.
It’s clear that the FCA has strong doubts and concerns about the cryptocurrency industry. The FCA clearly states that one of their main objectives is to create a strict response to money-laundering in attempts to further discourage and hopefully hault illicit Bitcoin activity.
Though the FCA is serious about regulating cryptoassets and eliminating illegal activity as best they can, they are not afraid to admit that still could be proven wrong.
“Taskforce appreciates that cryptoassets have the potential to bring benefits to markets, firms and consumers, there remains considerable risks”.
The FCA believes it will have determined which cryptoassets will fall under the new regulations and if they will be extending boundaries for blockchain technologies specifically before the end of 2018.