Matt Hopkins, Head of Fintech in the Financial Services team at the accountancy and business advisory firm, BDO LLP, comments:
“The Treasury is now moving to fix what has been a big hole in the regulatory wall. Considering how mainstream crypto investment has now become, there is a very real need to protect retail investors.
“Expanding the perimeter addresses the mismatch of risk to market integrity. The unregulated nature of many of these cryptoasset activities has felt anachronistic to the activities and market size for some time.
“As the market expands cryptoassets pose a threat to customers, market integrity and financial crime – it is right that the identified activities are inside the perimeter. The volume and price volatility of cryptoassets makes regulation of the sector particularly urgent.
“Huge amounts of consumer money now flows into cryptocurrencies, often advertised on social media and almost entirely out of the reach of the FCA. Regulation will make it much more difficult for crypto businesses to access investors who may not understand the risks they are taking.
“While the regulator must make sure not to stifle innovation in a fast-growing market, some may argue that enough retail money has been lost in unsuitable crypto investments already and the FCA should be allowed to close this loophole.”
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