[2018-09-18]'Wild West' Bitcoin 'should be regulated' [BBC]

[vit05]

BBC

Bitcoin and other digital currencies are a "Wild West industry" and need to be regulated to protect investors, a committee of MPs has urged.

Problems include volatile prices, minimal consumer protection and risks of hacking and money-laundering, says the Treasury Committee.

The committee said there were no well-functioning crypto-currencies and preferred to call them "crypto-assets".

It urged City watchdog, the Financial Conduct Authority to supervise them.

At present, the FCA has no power to regulate either the issuers of these assets or the exchanges on which they are traded.

"Crypto-asset investors are currently afforded very little protection from the litany of risks. Namely, there are no formal mechanisms for consumer redress, nor compensation," said the committee.

There are now more than 1,500 varieties of crypto-asset being traded on about 190 exchanges around the world.

Prices have soared and crashed alarmingly. In 2017, the price of a Bitcoin rocketed to nearly £15,000 before losing two-thirds of its value in just a few months.

Crypto-fundraising schemes, known as Initial Coin Offerings, have posed challenges for regulators around the world.

As the government and regulators decide whether the current Wild West situation is allowed to continue, or whether they are going to introduce regulation, consumers remain unprotected," said the Treasury Committee.

Nicky Morgan, who chairs the committee, said: "It's unsustainable for the government and regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting.

"At a minimum, regulation should address consumer protection and anti-money-laundering."

CryptoUK, which was set up in February as a self-regulatory body for the crypto-currency industry, said it welcomed the Treasury Committee's recommendations.

Iqbal Gandham, who chairs it, said: "Self-regulation by the industry was always intended to be a starting point - this must now be matched by government action.

"Regulatory oversight is essential to ensuring consumer safety, guarding against malpractice and providing much needed clarity to an industry that is fast maturing.

"It is therefore pleasing that the committee has endorsed our suggestion on how this can be delivered, by bringing responsibility within the FCA's perimeter of oversight."

[buwaytress]

Wonder when the actual report was written, probably drafted last year to collect dust on some desk before getting aired. 1500 different currencies? No well functioning cryptocurrency? Bitcoin hasn't had any down time in a decade, while we've seen some fiat die in the se period while other payment systems have crashed multiple times.

I do agree with consumer protection, similar to the tenets of Japan's regulations. End of the day, though, if Bitcoin works and is used as intended, customers must learn to be responsible for themselves. Kinda the whole point.

[hugeblack]

Nicky Morgan, who chairs the committee, said: "It's unsustainable for the government and regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting.
"At a minimum, regulation should address consumer protection and anti-money-laundering."

Consistent with this part, the use of cryptocurrencies does not necessarily need to be wholly anonymous but proof of identity is enough.

If the purpose of Bitcoin "or any alt" is the absolute privacy of what has made in this way, "anyone can track your coins."
However, the re-use of Bitcoin as an investment "as is happening in the markets" is to distance it from the purpose that was created. "decentralize coin."

[Kakmakr]

So the general rule should be that all investments should be given a soft landing if consumers risk investment into high risk investments?

What protection was there for the millions of people who lost money when the Banks caused a near economic collapse? The Banks are highly regulated, but the people still lost their money and their jobs and none of the Bankers went to jail. 

So looking at regulations to solve that problem, is simply ridiculous. 

The large majority of centralized exchanges are currently regulated and they have to adhere to KYC/AML regulations, so saying it is the "Wild West" is absolutely absurd and incorrect. 

[1Referee]

The large majority of centralized exchanges are currently regulated and they have to adhere to KYC/AML regulations, so saying it is the "Wild West" is absolutely absurd and incorrect.  

Being regulated is a very subjective matter.

Most exchanges are operating on illegal basis because they don't comply with local laws that requires them to register and obtain the necessary licenses. Adding KYC/AML policies is only a smoke screen 'solution' to temporarily keep the authorities outside your operation. It really boggles my mind that the authorities have been so soft regarding how shitty the situation around current exchanges is.

Once authorities start to wake up and take their job seriously, we'll see what's left of the current exchanges. Binance will definitely feel it.

Coinbase and Gemini are the only exchanges that are truly licensed and regulated. They won't have to fear about anything.

[Thekool1s]

@kakmakr they(Banks) are feeling the heat. I guess that's a good sign. But the strange thing is the timing, Right when we thought the market had hit its low. We see something like this pop up on the mainstream media. Wonder what's going on behind the scenes.

[Betwrong]

@kakmakr they(Banks) are feeling the heat. I guess that's a good sign. But the strange thing is the timing, Right when we thought the market had hit its low. We see something like this pop up on the mainstream media. Wonder what's going on behind the scenes.

I think them, being wise people, realize that the crypto market is not only not dying but is going to rise big time in the nearest future. It's better to be prepared beforehand for the mass adoption unless you want to have 'Wild West' on a much larger scale.

I think there are two options for crypto market: either it will stay unregulated and will be used by several million enthusiasts or it will be regulated and subsequently used by hundreds of millions of people around the world.

[rodskee]

Nicky Morgan, who chairs the committee, said: "It's unsustainable for the government and regulators to bumble along issuing feeble warnings to potential investors, yet refrain from acting.
"At a minimum, regulation should address consumer protection and anti-money-laundering."

Consistent with this part, the use of cryptocurrencies does not necessarily need to be wholly anonymous but proof of identity is enough.

If the purpose of Bitcoin "or any alt" is the absolute privacy of what has made in this way, "anyone can track your coins."
However, the re-use of Bitcoin as an investment "as is happening in the markets" is to distance it from the purpose that was created. "decentralize coin."

Obviously bitcoin created as decentralized coin using hash peer to peer function, but if the regulations is the answer of the whole problem about cryptocurrency continue dumping their price value
Much better bitcoin or cryptocurrency become regulated than to become zero value in the future

[Kemarit]

@kakmakr they(Banks) are feeling the heat. I guess that's a good sign. But the strange thing is the timing, Right when we thought the market had hit its low. We see something like this pop up on the mainstream media. Wonder what's going on behind the scenes.

They're always like that, even when the market is making a good run. We will hear news mostly negative and question the timing. Perhaps its just a coincidence, but one wonders what's their intentions? hmmm

@Betwrong - there might be a possible 3rd option, countries who will outright ban anything relating to country. But mostly though it will fell on 2 categories as you stated, wild wild west with no regulations, countries having to implement regulations to at least 'curb' out scammers, but still a win-win situation for crypto.

[Thekool1s]

one wonders what's their intentions? hmmm

Totally something which hasn't to do with getting in early... 

[BitHodler]

I think there are two options for crypto market: either it will stay unregulated and will be used by several million enthusiasts or it will be regulated and subsequently used by hundreds of millions of people around the world.

It depends on what you mean with unregulated. If it means that governments are letting everything crypto related grow and develop freely, then it can just as easily be used by hundreds of millions of people.

Another thing is that the more governments are trying to regulate this industry, the more they stimulate decentralized platforms to emerge and take over rapidly. This is quite a favorable option too in my opinion.

Crypto has been hard coded in people's brains by now, and there is no way you can get anyone to discard it entirely, regardless of how much people have lost due to bad investment decisions. We'll grow in any scenario.

Crypto needs time to grow and scale and not necessarily more regulations.

[Betwrong]

I think there are two options for crypto market: either it will stay unregulated and will be used by several million enthusiasts or it will be regulated and subsequently used by hundreds of millions of people around the world.

It depends on what you mean with unregulated. If it means that governments are letting everything crypto related grow and develop freely, then it can just as easily be used by hundreds of millions of people.

Another thing is that the more governments are trying to regulate this industry, the more they stimulate decentralized platforms to emerge and take over rapidly. This is quite a favorable option too in my opinion.

Crypto has been hard coded in people's brains by now, and there is no way you can get anyone to discard it entirely, regardless of how much people have lost due to bad investment decisions. We'll grow in any scenario.

Crypto needs time to grow and scale and not necessarily more regulations.

I'm on your side regarding that people should have more freedoms, this is especially true of economical freedoms. But let's see what reality is. There is no anarcho-capitalist state in the world, even a micro one. And although there is a possibility of appearing of such states in the future, no way they will be dominant during our lifetime. Other, non-anarcho-capitalist, states tend to regulate anything of a large scale.

That's why I think there are the two options for crypto market I've mentioned above, regardless of what me and you think would be better.

[Theb]

This shouldn't be in question really, the way to move forward is to have the whole market regulated already as it is the only way the government will agree to such assets being bought and sold around their country. Sure you will lose total anonymity when a regulated market is in full effect but the pros still outweighs the cons, a regulated market will surely only circulate legit tokens and the scam coins will be left to dust making the money of investors be protected from any kind of fraud, while the government at the same time will gain a substantial amount of tax collection from the market as no one will now there to evade their taxes via the cryptocurrency market.

[magneto]

This is already known.

Regulation is going to be inevitable in this space, and we're already seeing most countries having KYC/AML requirements one way or another. I really don't think that after all the regulations and restrictions placed on bitcoin, we can still call this the "wild west" bitcoin.

What needs to be noted is that regulation is not placed on bitcoin itself, but the exchanges and businesses who revolve around the operation of bitcoin related businesses. Their regulation in my opinion could be a positive for bitcoin, if done correctly.