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British lawmakers have backed calls for greater regulation of cryptocurrencies such as bitcoin in order to bring an element of control to a market that more resembles the "Wild West."
In a report on digital currencies published Wednesday, the Treasury Select Committee called for regulations to protect consumers and prevent money laundering.
Lawmakers - Industry - Price - Swings - Allegations
Lawmakers highlighted a rapidly emerging industry that's been troubled by wild price swings, allegations of fraud and worries it could be used to finance criminal or terrorist activity.
Virtual currencies, also known as tokens, are electronic alternatives to traditional money. The appeal of cryptocurrencies like bitcoin lies in their use of "blockchain technology" that records all transactions in a digital database while keeping identities private, allowing users to sidestep government or banking system oversight. Speculation has also played a part in their popularity: bitcoin's price skyrocketed late last year to more than $19,000 though it has since tumbled and is now trading at around $6,300.
Report - Committee - Government - Position - Regulation
In the report, the committee said the British government has taken an ambiguous position on regulation and argued that the industry's voluntary approach is inadequate. As a result, it said investors have been left open to risks including volatile prices and hacking vulnerabilities.
"Bitcoin and other crypto-assets exist in the Wild West industry of crypto-assets," committee chair Nicky Morgan said. "This unregulated industry leaves investors facing numerous risks."
Morgan - Government - Warnings
Morgan said the government needs to do more than "bumble along issuing feeble warnings to investors."
The committee also said British financial authorities need more power to regulate misleading advertisements by crypto-asset exchanges and initial coin offerings, which raise money for the tokens while crypto exchanges allow investors to...
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