Time To Regulate Bitcoin, Says UK Treasury Committee Report (theguardian.com)

Bitcoin and other cryptocurrencies are "wild west" assets that expose investors to a litany of risks and are in urgent need of regulation, MPs on the Treasury select committee have said. From a report: The committee said in a report that consumers were left unprotected from an unregulated industry that aided money laundering, while the government and regulators "bumble along" and fail to take action. The Conservative MP Nicky Morgan, the chair of the committee, said the current situation was unsustainable. "Bitcoin and other crypto-assets exist in the wild west industry of crypto-assets. This unregulated industry leaves investors facing numerous risks," Morgan said. "Given the high price volatility, the hacking vulnerability of exchanges and the potential role in money laundering, the Treasury committee strongly believes that regulation should be introduced."

Comments

But they wanted it that way

[WoodstockJeff]

The public wants bitcoin because it isn't regulated by any government.

They just don't like the risk that lack of regulation entails.

Re:But they wanted it that way

[jwhyche]

Actually the public doesn't want bitcoin at all. The only people who want bitcoin is mostly people looking to get rich quick, those looking to nefarious things on the internet, and a few individuals that value their privacy. What the public wants is a regulated stable currency that they can depend on.

Vauge Much?

[JBMcB]

What *exactly* are they proposing? They listed some issues with bitcoin that come with pretty much any other kind of investment, but investors aren't protected from, such as loosing all of your principal, forgetting passwords, and getting hacked.

These all happen to current traditional investors with current regulation. What exactly are they proposing to prevent this from happening with Bitcoin?

Re:Vauge Much?

[Sarten-X]

Other investment types are regulated, though, for exactly the risks you noted. It isn't the investment itself or its performance that is regulated. It's the behavior of the people working in the trade.

I used to work at a financial company. We carried insurance policies against our own negligence or accidents, and when somebody's account did indeed get hacked, we covered their loss. In our contracts and promotional materials, we made clear that the investments were investments, not a savings account, and there's no guarantee of any return.

The problem is that Bitcoin proponents and exchanges aren't actually complying with such regulations, and like to dance around definitions as it suits them. If you're asking about whether they file SEC* paperwork, then Bitcoin is just like a foreign currency, and isn't really in the SEC's jurisdiction. If you ask about whether its value is counted as taxable income like other currencies, then it's claimed to be an investment that the IRS* doesn't track until it's realized. If you're asking about the economic forecast, then it's going to shoot back up in value any day now, and it will be used for legal transactions and every vendor will accept it, and because it's got built-in scarcity, its value can only go up!

If cryptocurrencies were explicitly called out in regulations, the scammers and risky ventures would be legally culpable for their misleading actions. As it stands, they can just say "well, you should have known it was risky" and walk away.

* Or the SEC and IRS equivalents of your choice. I'm an American, so that's what I know.

Re:Also hurricanes

[Anonymous Coward]

Hurricanes are just getting way too destructive lately. It's time we started regulating how much destruction a hurricane is allowed to make.

You're right -- we can do so by taking steps to curtail things contributing to global warming.

Like cryptocurrency mining.

That is why idology fails.

[jellomizer]

Normally an Ideology based on absolutism fails.
Government Regulation is Bad! However without it there is a lot of abuse in the system without any peaceful ways to reconcile it.
Government Regulation is Good! However too much regulation can stifle innovation and risk taking, because Regulation takes much to long to adapt.

The thing is there needs to be a balance, and to make it worse, the balance point is never in the same spot. Sometimes the needle needs to be towards the left and other times it needs to be at the right. Fixing it in the middle is just as bad as being fixed in either direction, because in the Middle no one is happy.

We see in history good times under a particular political direction, then we see bad times under that same direction. They switch to the other side then things are good again, then they fail.

Re: It's not FOR investing

[iggymanz]

Ignorant of history, tulip market did come under regulation in 17th century, look it up.

Re:Time To Kill Bitcoin, Says UK Treasury Committe

[bill_mcgonigle]

The UK is powerless to regulate Bitcoin. They can prevent their citizens from participating in the future of money (whatever crypto that ends up being) but they cannot stop a global phenomenon.

I hope they do too - there are some smart UK'ers and who wants them competing with us? /s

Re: Time to flush buttcoin down the toilet

[iggymanz]

Hahaha, it's a solution looking for a problem. Superior distributed databases exist that properly scale, integrity verification is long solved problem too. Startups suckering investors with claims of block chain utility in business are going to fail next

Re:Dear Nicky

[Anonymous Coward]

It's generally about money that are not being paid taxes of.

If we didn't try to stop it, every rich company owner on the planet would be doing it, and thus the only people paying taxes would be the poor. Taxes to maintain the roads that the same rich companies use to move their products from factories to stores.

Re:Not quite true, IMO ....

[jellomizer]

Not Superior in its decisions, but powerful enough to enforce them.
So people are playing the game with the same set of rules. Without Government rules and enforcement there is no recourse to bad actors and encourages additional bad actors, because then different forms of Power will take over and take control.
A democratic-republic government at least gives the the common person a chance to to control such corruption and alternate temptation.

Ha ha sure.

[argStyopa]

"You know, I don't really think we need to regulate this, do we?"

-Said no government body, ever.