The UK’s crypto lobby has stepped up its influence in Westminster with the launch of a cross-party group of lawmakers, as politicians on both sides of the Atlantic intensify efforts to regulate growing digital asset markets.
The Crypto and Digital Assets Group, composed of UK MPs and members of the House of Lords, will work to make sure that new rules for the digital asset industry “support innovation”, according to SNP MP Lisa Cameron, who will chair the group.
The group also pledges to help tackle economic crime and consumer protection at a time when regulators have repeatedly warned about the risks to savers from crypto scams and unregulated firms. Scams involving cryptocurrencies cost investors $7.8bn this year worldwide, according to Chainalysis.
The founding of the Westminster group, which is backed by the digital asset trade association CryptoUK, comes as regulators and politicians race to catch up with the explosive growth of crypto markets last year.
“We are at a crucial time for the sector as global policymakers are also now reviewing their approach to crypto and how it should be regulated,” Cameron said.
The prospect of new standards has prompted a vigorous lobbying effort from crypto businesses. US legislative proposals, such as last year’s Senate infrastructure bill, which included new tax reporting requirements for crypto transactions, have attracted hostile lobbying from crypto firms, according to the Center for Responsive Politics, a US research group.
In the UK, crypto industry advocates have warned that the government has been too slow to settle the rules of the road for digital asset business, which risks pushing them offshore. The Financial Conduct Authority has banned crypto derivatives for retail investors and opposed crypto funds, such as the bitcoin ETFs launched in the US.
Philip Hammond, the former UK chancellor who last autumn signed up as an adviser to crypto custody group Copper, told the FT that “the UK has not moved as quickly as Switzerland, Singapore and even Germany” and that the country needed to embrace financial innovation to compete after Brexit.
The formation of the parliamentary crypto group follows a year of behind-the-scenes efforts by CryptoUK to rally lawmakers behind what it sees as the benefits of digital assets to the UK economy.
“Our primary focus will be education, education, education,” said Ian Taylor, executive director of CryptoUK. “There is no real advocacy and education at that level around crypto assets.”
The trade association — which represents companies such as Crypto.com and eToro — will serve as the parliamentary group’s secretariat, spending just under £50,000 this year to support the group, according to public filings.
High on the new group’s agenda will be to examine the FCA’s money laundering registration regime for crypto companies, as well as the outcome of two pending policy consultations on crypto advertising and stablecoins.
Cameron told the FT that looking at how to “best protect consumers” also needs to be a “top priority for government and regulators”. She said the rules for advertising and registering crypto firms need to be clear to help shield consumers from losses and give “UK firms business certainty”.
The new crypto group, which officially registered with parliament last week, counts former digital economy minister Ed Vaizey among its members, along with Tory MP Harriett Baldwin, a former JPMorgan executive and city minister.
