The UK’s financial watchdog – the Financial Conduct Authority (FCA) – has once again taken aim at Bitcoin and cryptocurrency, urging consumers to be cautious about investing in the asset class because it has “no intrinsic value”, reports Forbes.
Christopher Woorlard, executive director of strategy and competition at the FCA, said: “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’s warning does not necessarily come without merit considering the high levels of volatility associated with the cryptocurrency markets.
However, Herbert Sim – head of business for Broctagon Fintech Group – believes labelling crypto as having no intrinsic value is indicative that the FCA is considering banning Bitcoin and cryptocurrency in the UK.
Sim said: “Although not a ban, (the FCA’s warning is) a move in that direction. This lack of enthusiasm is shared by several countries; the US with its scrutiny of Libra, and India, who are looking to implement a similar ban on cryptocurrencies which are not state regulated.
“These movements could end up coming back to bite. The international competition on cryptocurrencies is heating up and there are huge risks in being left behind.”
The FCA’s warning comes not long after US President Donald Trump unleashed a scathing attack on cryptocurrencies, claiming: “I am not a fan of Bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air.
“Unregulated assets can facilitate unlawful behaviour, including drug trade and other illegal activity.”
However, more recently, Senate Banking Committee Chairman Mike Crapo shared his belief that the US could not ban Bitcoin, even if it wanted to, saying:
“If the United States were to decide – which I’m not saying it should – if the United States were to decide we don’t want cryptocurrency to happen in the United States and tried to ban it, I’m pretty confident we wouldn’t succeed in doing that because this is global innovation.”
Interested in hearing more about the FCA’s crackdown on cryptocurrency? Discover more about its potential plans to ban UK traders from the popular BitMEX platform.