News CryptoUK Responds to the BoE's Remarks on Cryptocurrencies Being...

CryptoUK Responds to the BoE’s Remarks on Cryptocurrencies Being a ‘Reputational Risk’

-

- Advertisment -

London Parliament

The Bank of England (BoE) has issued a letter to the CEOs of banks, insurance companies, and designated investment firms warning them of the ‘reputational risks’ of getting involved with cryptocurrencies.

The letter, titled ‘Existing or planned exposure to crypto-assets,’ was written by Sam Woods, deputy governor and CEO of the BoE’s Prudential Regulation Authority (PRA). Even though Woods notes that crypto assets have the ‘significant potential to benefit the efficiency and resilience of the financial system over time,’ he goes on with a cautionary tone.

“In their short history, crypto-assets have exhibited high price volatility and relative illiquidity,” he said. “Crypto-assets also raise concerns related to misconduct and market integrity – many appear vulnerable to fraud and manipulation, as well as money-laundering and terrorist financing risks. Entering into activity related to crypto-assets may give also rise to reputational risks.”

He adds that it is the organisation’s responsibility under PRA’s Fundamental Rules 3, 5, and 7 to: ‘act in a prudent manner; have effective risk strategies and risk management systems; and deal with regulators in an open and co-operative way, and disclose appropriately anything relating to your firm of which we would reasonably expect notice.’ These remarks follow those made in March when the BoE said that the crypto industry should be held to the same standards as the financial system.

CryptoUK, the first self-regulatory trade association for the U.K. cryptocurrency industry, swiftly responded to the BoE’s comments. Iqbal V. Gandham, chair of CryptoUK, stated that the ‘majority of firms within the cryptocurrency sector operate to a high standard, replicating existing models of compliance and best practice for financial services firms.’

He added, though, that the deputy governor’s statement highlights the need for regulation in the industry that enables companies within the sector to grow and flourish.

“Currently, the risks from cryptocurrencies largely stem from low levels of consumer knowledge and a lack of an appropriate regulatory framework surrounding them,” he said. “The U.K. has the potential to become a world leader within the crypto economy. We urge governments and regulators to ensure that the U.K. is well-positioned to seize the opportunities that this sector could bring.”

Back in May, CryptoUK, which is made up of eight members, urged the U.K.’s Treasury to regulate the industry in the country. More recently, and in light of the hack at South Korean crypto exchange Bithumb, CryptoUK assured British MPs that customers’ crypto assets were secure after concerns were raised.

CryptoUK said its members, who include Coinbase, Coinfloor, Coinshares, and eToro to name a few, have committed to storing at least 90 percent of customers’ holdings offline.

Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest news

Network Security Using Cryptography: Everything you need to know

This article will describe what is Network Security Using Cryptography and everything you need to know before...

Mercuriex Cryptocurrency Exchange Launches New Utility Token, SURF

MercuriEx Cryptocurrency Exchange, originally developed in 2017, came under new ownership in December 2019. Since taking over the exchange,...

Fungibility: Bitcoin Mixers Favorite Term That No One Understands

Fungibility, perhaps the most important concept when dealing with a decentralized and anonymous currency, but does bitcoin...

Crypto can’t thrive in the real world – but stablecoins can

We can safely say that the hype about cryptocurrencies is pretty much over. The claims of Bitcoin...
- Advertisement -CryptoUK Responds to the BoE's Remarks on Cryptocurrencies Being a 'Reputational Risk'

How to double your crypto

Most of us have a small gambler deep inside our souls. We love to feel the thrill...

Cryptocurrency Top Security Risk Concerns: What You Can Do to Protect Your Crypto

A report by CipherTrace revealed that in the first half of 2019, criminals and fraudsters stole more...

Must read

Mercuriex Cryptocurrency Exchange Launches New Utility Token, SURF

MercuriEx Cryptocurrency Exchange, originally developed in 2017, came...
- Advertisement -CryptoUK Responds to the BoE's Remarks on Cryptocurrencies Being a 'Reputational Risk'CryptoUK Responds to the BoE's Remarks on Cryptocurrencies Being a 'Reputational Risk'

You might also likeRELATED
Recommended to you