{"id":4096,"date":"2023-07-06T22:49:00","date_gmt":"2023-07-06T22:49:00","guid":{"rendered":"https:\/\/mysourcefunding.com\/startups\/london-wants-american-crypto-refugees\/"},"modified":"2023-07-06T22:49:01","modified_gmt":"2023-07-06T22:49:01","slug":"london-wants-american-crypto-refugees","status":"publish","type":"post","link":"https:\/\/mysourcefunding.com\/?p=4096","title":{"rendered":"London Wants American Crypto Refugees"},"content":{"rendered":"<div>\n<p class=\"paywall\">The Sunak government\u2019s desire to attract crypto could give impetus to attempts to build a more comprehensive regime for the industry. But it could also create competing incentives. Critics of the government\u2019s approach say they fear that expediting regulations and giving the crypto industry too much room to maneuver could lead to decisions that expose consumers to risks, or end up undermining long-running attempts to prevent financial crimes, such as money laundering and terrorist financing.<\/p>\n<p class=\"paywall\">The message lobbyists are \u201cpouring into the ears\u201d of politicians is that crypto needs bespoke rules if the UK is to keep pace with financial innovation, says Martin Walker, director for banking and finance at the Center for Evidence Based Management, a nonprofit that advises businesses on management strategy. Walker, who gave evidence as part of a 2018 government crypto inquiry, says that an \u201canxiety-driven flexibility\u201d toward crypto risks a repeat of previous boom-and-bust cycles in finance. \u201cAfter the dotcom bubble, which involved a lot of fraud, and the 2007 financial crisis, driven by bad financial innovation, it\u2019s like the lessons have been completely forgotten,\u201d he says.<\/p>\n<p class=\"paywall\">The UK capital\u2014described sneeringly as \u201cLondongrad\u201d or \u201cMoscow-on-Thames&#8221; for its past willingness to host money from Russia and other pariah states\u2014already has an unsavory reputation as a venue for money laundering and other financial crime, says Stephen Diehl, a crypto-skeptic commentator. Inviting crypto into the fold would only give its critics more ammunition. \u201cI don\u2019t think the predominant view is that we want to become a dark money laundromat,\u201d he says.<\/p>\n<p class=\"paywall\">Some in Sunak\u2019s own party don\u2019t agree with his vision for crypto, either. In May, a report from the Treasury Select Committee, a cross-party group of MPs, claimed that cryptocurrencies serve \u201cno useful social purpose\u201d and expose consumers to fraud and scams. It also asserted that crypto trading should be regulated as a form of gambling, not as a financial service, or risk a \u201chalo effect\u201d that creates the false impression of safety.<\/p>\n<p class=\"paywall\">To avoid glamorizing crypto, the FCA has historically adopted a cautious approach. \u201cGiven the volume of harm, our position has always been that it\u2019s a high-risk investment,\u201d says Matthew Long, director of payments and digital assets at the FCA. \u201cWe\u2019ve been clear that people should be prepared to lose their money.\u201d<\/p>\n<p class=\"paywall\">Because the UK\u2019s ability to attract crypto businesses to its shores hinges on the tenor of its eventual regulatory regime, there is concern the FCA may come under political pressure to relax its stance as it develops a rulebook.<\/p>\n<p class=\"paywall\">Sunak\u2019s plan, McAteer says, imposes a secondary and potentially \u201cvery dangerous\u201d objective: economic growth. It creates an opening for political interference as the FCA drafts the rulebook for crypto, he says, when it should be free to prioritize public interest.<\/p>\n<p class=\"paywall\">For as long as there are few specific rules in the UK and political promises continue to be vague, that fear will remain amorphous and unspecific. It\u2019s unclear whether crypto firms might be afforded more lenient reporting requirements, for example, or be allowed to offer riskier financial products, such as crypto derivatives, or be free to cut corners when storing customers\u2019 crypto. But the idea that third-parties might be able to meddle in rulemaking is worrying, McAteer suggests, and regulators could find themselves under pressure if they take decisions that interfere with the political agenda. The FCA will be \u201chauled in front of select committees and the Treasury,\u201d McAteer says, and \u201ccriticized if seen to be stifling innovation.\u201d The Treasury did not return a request for comment.<\/p>\n<p class=\"paywall\">The FCA dismisses the idea that government or industry players might be allowed to puppeteer: \u201cWe\u2019re an independent regulator,\u201d says Long. \u201cOnce our perimeter is set, we do our job, which is to create rules.\u201d<\/p>\n<p class=\"paywall\">But the ability for regulators to perform their protective function, McAteer says, is contingent on their capacity to tune out the appeals of industry and stand apart from political machinations. \u201cIt\u2019s a really bad sign when there is a confluence of hype and government pressure,\u201d he says. \u201cThat\u2019s when mistakes are made.\u201d<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.wired.com\/story\/london-wants-american-crypto-refugees\/\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Sunak government\u2019s desire to attract crypto could give impetus to attempts to build a more comprehensive regime for the industry. But it could also create competing incentives. Critics of the government\u2019s approach say they fear that expediting regulations and giving the crypto industry too much room to maneuver could lead to decisions that expose [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4097,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[77],"tags":[],"class_list":{"0":"post-4096","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-startups"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>London Wants American Crypto Refugees | Brandiary<\/title>\n<meta name=\"description\" content=\"The Sunak government\u2019s desire to attract crypto could give impetus to attempts to build a more comprehensive regime for the industry. 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