Seven of the world’s leading cryptocurrency exchanges and trading platforms have banded together to launch CryptoUK, a self-regulating body for cryptocurrency. CryptoUK plans to collaborate with the UK government to crackdown on fraud and protect customers by creating a code of conduct.
The decision to set up its own regulation came in response to the European Central Bank’s refusal to regulate Bitcoin. Earlier this week, Mario Draghi, president of the European Central Bank (ECB), mentioned the bank’s position on regulation in a video released as part of the #AskDraghi series. The video series is part of an initiative meant to open up dialogue on topics such as Europe’s economy, the possibility of a new global crisis, cryptocurrencies, and blockchain. When asked whether he would invest in Bitcoin, Draghi said he would think “carefully” before buying Bitcoin given that “the value of Bitcoin oscillates wildly.” Draghi then commented on the number of questions he noticed regarding cryptocurrency regulation.
“I’ve also seen that many of you posted questions about whether the ECB is going to ban bitcoins or it’s going to regulate bitcoins. I have to say, it’s not the ECB’s responsibility to do that.”
Due to the lack of regulatory action, Coinbase, CryptoCompare, CEX.IO, eToro, BlockEx, CoinShares, and CommerceBlock took it upon themselves to collaborate on a code of conduct that will better prevent money laundering as well as protect customers. As stated on CryptoUK’s website, the company intends “to help educate politicians and regulators about the cryptocurrency industry” with the ultimate goal of “developing an appropriate operating framework for the UK.”
CryptoUK’s code of conduct currently consists of three key principles highlighting the need for transparency in regulation. Firstly, the company acknowledges the UK’s potential to become a global leader in cryptocurrency industry. Secondly, all members of the trading body vow to promote “appropriate regulation” as it pertains to the security of customers and “clarity for cryptocurrency financial service providers.” Thirdly, members agree to abide by the self-regulation established by the company, committing themselves to improving regulation as needed. The company explicitly stated it will not be regulating Initial Coin Offerings (ICOs), though it might possibly tackle ICOs in the future.
The chair of CryptoUK, eToro’s Iqbal V Grandham, emphasized the code of conduct’s significance:
“The Code of Conduct is at the heart of everything we do. It is not finished. It will be improved and refined, in collaboration with industry, policy makers and others. We hope it can form the blueprint for what a future regulatory framework will look like.”
CryptoUK is the first self-regulating body of its kind in cryptocurrency. It will be interesting to see whether other exchanges around the world will follow its lead and establish their own code of conducts.
