MPs have called for regulations to protect investors in Bitcoin and other digital currencies, describing the market as a “wild west” that aids money laundering.
Members of the Commons Treasury Committee say that at present investors are unprotected as cryptocurrencies are not regulated by the Financial Conduct Authority (FCA).
The committee has produced a report in which it calls for regulations to protect consumers and combat money laundering and warns that cryptocurrency investors could lose everything due to the market’s volatility.
It accused the Government and the FCA of “bumbling along” and failing to tackle the issue. The committee chairwoman, Conservative Nicky Morgan, said: “Bitcoin and other crypto-assets exist in the wild west industry of crypto-assets. This unregulated industry leaves investors facing numerous risks… the Treasury committee strongly believes that regulation should be introduced.”
There are potential fortunes to be made in Bitcoin and other cryptocurrencies, but the price is so unpredictable that experts say it is just as possible to lose everything.
Financial experts have issued a number of warnings about cryptocurrencies and JP Morgan boss Jamie Dimon singled out Bitcoin as “only fit for drug dealers, murderers and people living in North Korea.”
He added: “You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.”
Bitcoin buyers can avoid using banks and other payment methods to buy goods and services. It was introduced in 2009 and is currently valued at more than $6,200, but last year its price rocketed by more than 900 per cent to a high of almost $20,000.
The Treasury committee said regulation was the way forward and that the industry could then offer great potential for investors.
Iqbal Gandham of CryptoUK, which runs a self-regulation scheme covering some cryptocurrency firms operating in Britain, welcomed the report and said it had been calling for “proportionate” regulations to raise standards.
