Last week saw the publication of the UK’s HM Treasury report on crypto assets, with Rt Hon Nicky Morgan MP, Chair of the Treasury Committee, commenting that crypto assets exist in the ‘wild west’.
Jamie Burke (pictured) is CEO of Outlier Ventures (OV), a firm that was launched in 2014 as the first European VC focused on blockchain technologies and has since extended activities into North America.
Burke has commented on the conclusions reached by the Committee, saying: “We completely agree with the Committee’s view that there would be benefits from greater regulatory oversight in this area, and that the implementation of an appropriate and proportionate regulatory environment for crypto assets could position the UK well to become a global centre for this activity.
“However, we have concerns that the report fails to account for the broad spectrum of possible functions for crypto assets. For example, adopting a one-size fits all approach to the regulation of ICOs (such as, through treating all crypto assets in the same way as equity or debt under the Regulated Activities Order) isn’t necessarily appropriate. Such an approach risks ‘throwing the baby out with the bathwater’ for those crypto-assets that have serious use cases for advancing say a particular industry, or digital ecosystem.”
OV believes that more in-depth analysis is needed to ensure that regulators have the mostly fully rounded understanding of the range of different crypto assets.
Burke says: “Achieving this will mean they are in the best position to put in place regulation that provides sufficient protection of consumers, which allows action to be taken against bad actors whilst also enabling sustainable growth of the crypto asset industry in the UK.
“Heavy handed regulation, without the required analysis of this extremely complex area, risks a flight of innovation from the UK to other jurisdictions that have a more favourable regulatory environment. We believe the UK should embrace aspects of this industry, not all of it. But we must get that decision right now. The crypto assets industry is continuing to evolve at a rapid pace and regulators need to have sufficient ability to adapt to meet, rather than stifle, that ongoing development.”
