A new report asked Members of Parliament (MPs) in the United Kingdom to tread lightly when it came to pushing for regulations on cryptocurrencies, arguing that poorly instituted legislation could impact the UK’s standing as a leader in the fintech world.
The report was authored by the British Business Federation Authority (BBFA), the law firm Baker Botts and venture capital fund Novum Insights, according to the Telegraph.
The overall argument of the report was “bad regulation is worse than no regulation at all.”
A Pushback Against Financial Regulators
The group specifically singled out a proposed plan by MP’s to give the UK’s Financial Conduct Authority a mandate to stamp out illegal crypto-related activity.
Authorities like the FCA and the Bank of England are reportedly collaborating on a proposal for new cryptocurrency regulations amid widespread allegations of fraud and money laundering inside of the sector.
The Telegraph wrote how Bank of England Governor Mark Carney referred to Bitcoin as a “global speculative mania” earlier in the year, and called it something that “exhibited all the classic hallmarks of bubbles.”
CryptoGlobe yesterday reported on the UK Parliament’s Treasury Select Committee's recommendation in September to the FCA concerning regulatory oversight. The FCA was encouraged to extend their scope to cryptocurrencies and ICOs.
The new report however, believes that the MPS proposed plan could harm ‘any other kind of asset’ because it is “ashamedly geared around bitcoin.”
BBFA chief executive Patrick Curry argued inappropriate legislation levied against the industry could lead to an exodus of cryptocurrency exchanges from the UK.
More Sophisticated Legislation Needed
Speaking on potential legislative crackdowns, Curry noted the use of cryptocurrency “is still a voyage of discovery and these technologies are being refined for different types of use.”
Baker Botts corporate technology partner Neil Foster recommended authorities should focus their efforts on crafting more nuanced legislation to prevent the lumping of “crypto assets” like stocks or bonds under the same legal umbrella.
According to Foster, “sophisticated classification” should make it possible to “work out what could be a regulated activity.”