BITCOIN: IN SEARCH
OF A REGULATOR?
IAN BENSON
IMAGE OF
THE MONTH
Fergie time
Mischief maker Paddy Power
was up to its old tricks this
month after mocking Manchester
United’s fortunes this season
under David Moyes with the
delivery of a waxwork of old
boss Sir Alex Ferguson
MIKAEL PAWLO
KELD KNUDSEN
Group CEO
Pawlo co-founded the Maltalicensed online casino – together
with Henrik Bergquist and
Fredrik Sidfalk – in 2008 and is
now group chief executive. He
led the public listing of Mr Green
& Co, the parent company of
operator Mr Green Ltd, in 2013
and has seen the online business
exceed the growth of the overall
online gaming market.
Chief financial officer
Knudsen has been chief
financial officer at Mr Green
since January 2012 and also
held the role of CEO on an
interim basis between May
2012 and January 2013. He
joined the online casino from
Swedish-listed operator
Unibet where he worked
as head of finance for nearly
two years.
www.egrmagazine.com
DIRECTOR, FINANCIAL SERVICES AT MACLAY MURRAY & SPENS
Bitcoins are topical as a
new and versatile means
of payment, especially
in relation to the gaming
sector, and there are any
number of Bitcoin gambling
opportunities including
casinos, poker, sports
betting and lottery bingo.
There are clear benefits
to be gained for gaming
operators by accepting
and offering Bitcoins as a
method of payment.
Because of their inherent
characteristics, payments
by Bitcoins can be made
anonymously, processed
instantaneously with
minimal transaction costs,
payments made by Bitcoins
are irrevocable. However,
the use of Bitcoins also
presents issues, such as
their regulatory status.
It is not straightforward
to determine whether
virtual currencies such
as Bitcoins fall within
the perimeter of the UK
financial services regulatory
framework and in particular
the Financial Services
and Markets Act 2000
(“FSMA”), the Payment
Services Regulations 2009
and the Electronic Money
Regulations 2011.
The FCA cannot regulate
an activity unless it believes
BO
WÄNGHAMMAR
Malta CEO
One of the operator’s latest
recruits, Wänghammar joined
the firm in January to lead
Mr Green Ltd from its base
in Malta. Wänghammar was
recruited from Swedish
eyewear firm LensWay where
he held the role of CEO,
having previously worked at
bwin.party from 2007 to 2010.
it has the power to do so. In
that regard, it appears that
while the FCA is looking
closely at Bitcoins, it is not
able to recognise Bitcoins as
a currency and is therefore
not able to regulate bitcoin
exchanges on this basis.
Indeed, while the
regulations which derive
from EU directives use a
broad concept of “funds”
(which was intended to
be technology neutral),
because the value of
Bitcoins is independent of
the value of real currency
and it seems that there is
no issuing authority from
which Bitcoins can be
bought or against which
Bitcoin users have a claim,
Bitcoins appear at the
moment to fall outside the
scope of the regulations.
Leaving aside payment
services and electronic
money regulation, can
Bitcoins be considered as
regulated investments?
While initi