Members of Parliament in the UK told Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), that cryptocurrencies are not investments and the words “invest and investment” should not be used in the context of these assets, per The Times.
“The words ‘your investment’ endorse the idea that this is an investment on par with an FTSE 100 company or a unit trust,” Harriet Baldwin, Conservative MP for West Worcestershire reportedly said.
Baldwin went further, claiming the FCA’s list of unregistered cryptocurrency businesses can be a hindrance to the regulator’s anti-money laundering regime.
“Your website actually publishes a list of unregistered crypto asset businesses for anti-money laundering purposes. It’s meant to be helpful but it could also be helpful to someone who just wants to launder money,” the MP and former JP Morgan banker added.
The FCA’s complex relationship with crypto
The FCA is the UK’s competent authority when it comes to supervising money laundering risks presented by cryptocurrency businesses.
However, many of the regulator’s statements over the last year have not focused on financial crime, but instead on consumer protection.
At the start of the year, the FCA said consumers should be “prepared to lose all their money” if they chose to invest in cryptocurrencies. Rathi reiterated this stance a second time in September.
The FCA has also previously said consumers are “unlikely” to have access to the Financial Services Compensation Scheme—a compensation scheme to cover losses if “something goes wrong”—if those losses occur in crypto.
Rathi doubled down on this during his discussion with MPs, although he did not appear to have the same enthusiasm for ditching investment language altogether.
“Personally, I would suggest we simply say that anything crypto-related should not be entitled to compensation, so that consumers are clear about that when they are investing.”
“We’ll have a discussion about what the wording should be,” he added.