Crypto assets have ‘no intrinsic value,’ UK market watchdog warns
Bitcoin and over 4,000 of its alternatives have no assets or guarantee to support them, unlike hard currencies such as the dollar or the pound. These are backed by the government that issues them, a characteristic that digital money cannot boast, the British regulator concludes.Also on rt.com Iran poised to legalize cryptocurrency mining as potential path out of US sanctions trap
Such clarifications were emphasized in a final guidance document published Wednesday by Britain’s Financial Conduct Authority, or FCA. The regulator said its guidance aims to help companies and people working with cryptocurrencies to understand if their crypto asset activities come under existing rules regulating financial exchanges.
“This will allow firms to have a better understanding of whether they need to be authorized and what they need to do to ensure they are compliant,” the watchdog said, in a statement cited by Reuters.
It also clarified that tokens such as bitcoin, litecoin and others do not come under existing rules and therefore do not require authorization from the regulator, which should make their consumers alert.
“Consumers should be cautious when investing in such crypto assets and should ensure they understand and can bear the risks involved with assets that have no intrinsic value,” the FCA said.Also on rt.com ‘US$ is the only real currency!’ Trump demands banking regulation of bitcoin, Facebook’s Libra
It further noted that firms which do offer so-called security tokens providing rights and obligations like shares or funds to guarantee their currencies must be officially authorized, a fact which also should not slip the mind of a potential consumer.
Regulators in Britain, the European Union and the United States have, for some time now, been looking at ways to tuck crypto assets into existing securities and consumer protection rules, with criticism of digital money adding momentum to the process.
Earlier this month, US President and billionaire businessman Donald Trump lashed out at cryptocurrencies, after Facebook announced plans to launch one of its own – the libra – stating that any crypto asset must become subject to all financial regulations that govern the circulation of hard currencies. Trump openly blasted digital assets for their “highly volatile value,” stating they are “based on thin air” and “can facilitate unlawful behavior.”
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