UK calls for regulating 'wild west' cryptocurrencies

UK lawmakers on the Treasury select committee have called for regulation of cryptocurrencies which they consider to be "wild west" assets that expose investors to risks.

The MPs also said they want to prepare Britain to be a legitimate home for the trading of digital currencies and to mitigate the dangers they could pose to investors. Regulation could also increase the liquidity of the market and leave Britain well placed to become a global hub for crypto.

Conservative MP and chair of the committee, Nicky Morgan said the situation was unsustainable: "Bitcoin and other crypto-assets exist in the wild west industry of crypto-assets. This unregulated industry leaves investors facing numerous risks."

Morgan said. "Given the high price volatility, the hacking vulnerability of exchanges and the potential role in money laundering, the Treasury committee strongly believes that regulation should be introduced."

Currently, crypto assets are not covered by the Financial Conduct Authority and there are no formal mechanisms for consumers to turn to when they need compensation or redress.

The FCA said: "The FCA agrees with the committee’s conclusion that bitcoin and similar crypto-assets are ill-suited to retail investors, and as we have warned in the past, investors in this type of crypto-asset should be prepared to lose all their money."