The mammoth growth of the cryptocurrency industry has triggered several world governments to change the ways they regulate virtual assets. European countries have taken a clear stane on the matter of cryptocurrencies with most of the member states supporting the growth.
According to recent reports, Britain has taken new steps to curb the practice of illegitimacy in the native cryptocurrency ecosystem. The country’s finance ministry recently proposed that the country’s financial watchdog could soon get the power to regulate cryptocurrencies such as Bitcoin.
The British Financial Conduct Authority currently has the power to approve any and all financial promotions from an unauthorized third-party firm. Sources close to the FCA’s workings claimed that the established system was not working as well as they wanted it to. The proposed changes will seek to establish a pre-vetting procedure where companies will be asked to submit their changes to a “regulatory gateway”.
John Glen, the Treasury and City Minister of London mainly pointed out at firms that were selling unknown thrid party adverts even after selling regulated investments. He was quoted as saying:
“If adverts by unauthorised firms are misleading, or don’t fully outline the risks, then people can end up losing money. That’s why we want to put more protections in place around such financial promotions, including the promotion of cryptoassets, while continuing to ensure people have access to a wide range of products on the market.”
Misleading advertisements and information on the internet have led to multiple incidents where people have lost their investments. A 2019 Q4 analysis of the cryptocurrency market showed there was a massive increase in the number of scams as the years progressed. Billions of dollars worth of cryptocurrencies were lost as a result of phishing schemes as well as exchange hacks.
Many experts agree that an intervention by the government body will be the quickest method to eradicate unsafe third party programs and content. The HM Treasury further added that a lack of crypto regulation was one of the main hindrances for its mainstream adoption. Another research pointed out that Britons were increasingly looking for “Get rich quick schemes”, forcing them to adopt any means to make money.