Creating the UK’s first cryptocurrency trade body
Agency: Headland Consultancy
Headland was tasked with creating the UK’s first self-regulatory trade body for the cryptocurrency industry in order to secure appropriate regulation for the fast-growing sector. The industry also needed a coherent voice to engage with media, regulators and politicians whose knowledge and understanding of crypto currencies was limited.
A lack of regulation also created an uncertain operating environment which could hold back the industry’s growth and allow less scrupulous companies to enter the marketplace, potentially bringing the sector into disrepute.
Self-regulation would demonstrate the industry’s intentions and also give it licence to engage with politicians and help shape the regulatory environment.
Headland worked to bring together the largest players in the market, who would serve as founding members of the trade body. Discussions led to the development of a tailored set of standards to protect consumers and prevent criminal activity, forming the basis of three key principles and a 12-step Code of Conduct, which addresses issues such as transparency, due diligence and integrity. Working groups were formed to examine emerging issues, and to develop policy in other areas, such as Initial Coin Offerings (ICOs).
Having established its Code of Conduct, the group started to build up its media profile and also to develop relationships with key decision makers, including politicians, ministers and regulators, from which to make recommendations on the future regulatory environment.
Aware that cryptocurrencies were confusing for many, Headland and CryptoUK members met with back bench MPs to introduce the concept and answer any questions. A website was created to provide an informative resource to help politicians understand the sector and the technology underpinning it. In its first 12 months, CryptoUK hosted 23 meetings with politicians, policy makers and officials.
It also took a radical approach by pursuing a select committee inquiry into cryptocurrencies, engaging with the Treasury Select Committee. The hearing provided a platform for CryptoUK to give oral evidence. The committee’s report and recommendations drew heavily upon this evidence, ultimately closely reflecting CryptoUK’s blueprint for regulation.
Following its meetings with Treasury ministers, the Government announced a Cryptoassets Taskforce, comprising officials from the Treasury, Bank of England and Financial Conduct Authority, to examine the case for regulatory change. Its ultimate report endorsed CryptoUK’s call for regulation but also, more importantly, its model for adopting this, which was based on an extension of the regulatory perimeter rather than a new and bespoke system.
CryptoUK is now working with regulators and officials to shape the regulatory environment, ensuring it reflects the latest developments and supports the industry’s future growth. It has now 35 members, ranging from executive, community and associate.
The judges were impressed by the way Headland rose to the challenge, describing an offer to build a trade body from scratch ‘unprecedented’. They viewed the campaign as an intelligent, engaging way for an industry to demonstrate maturity.