Global regulators are again talking about tighter control over the cryptocurrency market as bitcoin approaches new records.
The British Financial Conduct Authority (FCA) and the European Central Bank (ECB) both emphasized the need for stricter oversight of cryptocurrencies, noting the extreme volatility and criminal activity often associated with cryptocurrencies, the Financial Times reports.
ECB President Christine Lagarde said at Reuters Next that bitcoin is “a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity”. Lagarde called for the development of regulations for working with cryptocurrencies at the global level, within the G7 or G20 groups. Lagarde added that the Financial Action Task Force on Money Laundering (FATF, FATF) is increasingly focusing on cryptocurrencies.
“If there is an escape, that escape will be used — if anything it shows that global co-ordination, multilateral action is needed,” she said, adding that the Financial Action Task Force on Money Laundering was increasingly focusing on cryptocurrencies. “Global cooperation and multilateral action is absolutely needed, whether it's initiated by the G7, moved into the G20 and then enlarged, but something that needs to be to be addressed.”
The UK-based FCA said it was concerned about unregistered investment schemes offering lucrative returns associated with cryptocurrencies, as well as high levels of volatility in the price of crypto assets. Retail investors participating in such schemes run the risk of losing all their money, the regulator warns, while they will no longer be able to seek protection from the regulatory authorities in the case of massive losses.