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UK crypto: ‘Tension exists between parliament and regulation’, says SNP’s Dr Lisa Cameron

By Darius McQuaid

Edited by Charlie Mellor

15:19, 1 December 2022

Representation of the digital crypto Ethereum and bitcoin
Cameron wants “communication” between the FCA and crypto industry to improve – Photo: Getty Images

The chair of the UK all party parliamentary group (APPG) on crypto and digital assets, Dr Lisa Cameron, has revealed that a “tension exists between parliament and regulators regarding crypto”.

Cameron, who has served as the UK member of parliament (MP) for East Kilbride, Strathaven and Lesmahagow since 2015, spoke out at The Financial Times’ Crypto and Digital Assets Summit: Winter Edition on Monday 28 November.

The Scottish National Party (SNP) MP added that “there has been a great deal of interest in crypto from MPs, including [members of] the House of Lords” and that a “momentum” was building in Parliament.

However, following the collapse of the FTX cryptocurrency derivatives exchange into bankruptcy on 11 November, the MP said “there has been a great deal of reputational damage” and that “legislators will be more cautious now after FTX”.

Cameron also repeated the phrase used by Gary Gensler, chair of the US Securities and Exchange Commission (SEC), that crypto is like the “wild west”.

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Professionals poached from FCA by crypto firms   

The SNP MP detailed how she has spoken to the Financial Conduct Authority (FCA) and it has explained that it is looking into the risk management side of crypto. However, many of the FCA’s employees have been poached by the crypto industry, Cameron added.

Additionally, Cameron stressed that “communication” needs to improve between the FCA and the crypto industry  

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Crypto education

Cameron went on to say she would ask Parliament’s Education Committee – which scrutinises the work of the Department for Education – to look into how schools and universities teach students and pupils about the digital asset sector.

She also spoke of the “amazing positive impact” crypto has had in Ukraine after the country’s digital finance minister told her and other MPs how crypto had helped the country in its time of need following Russia’s invasion on 24 February. 

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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