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- A Crypto and Digital Assets Group has been established by the members of the U.K. parliament and House of Lords togetherly, as they consider this time as crucial for the crypto industry.
- Supporters of cryptocurrency have warned that the slow pace that the government of the U.K. is showing in introducing rules for businesses might push them away.
- As per some reports, criminal activities, including hacks and Crypto scams, have increased too much, resulting in a loss of $14 billion in 2021, due to which crypto regulators and authorities constantly warn individuals about the involvement of such risks.
On Friday, the Financial Times reported that the members of the U.K. parliament and House of Lords have togetherly established the Crypto and Digital Assets Group to make sure that new rules that emerge for the crypto industry would support innovation. The cross-party group of lawmakers would be chaired by Lisa Cameron, the M.P. of SNP (Scottish National Party). She said that it is an important time for the crypto industry because the global policymakers are also currently looking over their perspective about crypto and how it must be regulated.
The new crypto group has registered itself officially with the parliament in the past week. The members of this new official crypto group include Tory MP Harriett Baldwin, a former executive of JPMorgan, and Ed Vaizey, the former Digital Economy Minister. A trade association for digital assets, Cryptouk, would be working as the parliamentary group’s secretariat. Cryptouk has also been constantly influencing legislators for positive regulation on the crypto industry in the U.K. for a year.
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The FCA Bans Crypto For Retail Investors!
Some of the supporters of cryptocurrency have warned that, since the government of the U.K. has been relatively slow in introducing rules and regulations for cryptocurrency businesses, the risk of driving them away would increase with time. Crypto derivatives have been banned by the FCA (Financial Conduct Authority), the U.K. financial watchdog, for opposed crypto funds and retail investors.
Regulators and government authorities have constantly alerted individuals about the risks from unregulated organizations, hacks and scams in the crypto industry. Despite this, the hacks and scams in the crypto ecosystem, especially in the DeFi ecosystem, have consistently increased over the past year.
Increasing Need Of Regulation
As per the reports from Chainalysis, the blockchain data analytics organization, the loss from hacks and scams have almost doubled from 2020, reaching $14 billion in 2021 from $7.8 billion in 2020. The most suitable ecosystem for hacks and scams is considered to be DeFi (Decentralized Finance) which observed an increase of 335% from 2019 to 2020 and a 1,330% increase from 2020 to 2021, in the loss by hacks and scams. With increasing criminal activities, the demand for regulation has increased proportionally, which is needed in some way somehow.
