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Britain's Financial Conduct Authority (FCA) said Monday that creating a regulatory regime for the cryptocurrency industry will take careful thought. Britain’s finance ministry already had a public consultation as to whether some crypto-asset promotions need regulation. “There are no assets or real world cash flows underpinning the price of speculative digital tokens, even the better known ones like Bitcoin, and many cannot even boast a scarcity value,” FCA Chair Charles Randell said in a speech.
“We simply don’t know when or how this story will end, but – as with any new speculation – it may not end well.”
According to Randell, there are two areas where the regulators should take action; one is to reduce the damage from the promotion of cryptocurrencies, and the other is to stop the contagion at authorized firms from unregulated activities in these assets. In the past few months, the FCA issued warnings against the leading cryptocurrency exchange Binance and banned it from undertaking any regulated activity. The watchdog said the exchange isn't capable of being supervised properly. Last week, FCA, which does not regulate crypto assets, said the UK-based entity of Binance, Binance Market Limited (BML), is now authorized to operate in the country for “specific activities and product types.” “We are not going to award FCA registration or authorisation to businesses which won’t explain basic issues, such as who is responsible for key functions or how they are organised,” said Randall. “That would be token regulation in the worst sense.”