The United Kingdom has decided to put a stop to cold calls selling financial products, including insurance and cryptocurrencies, as part of an attempt to clamp down on fraud. With the nation experiencing approximately £7 billion ($8.7 billion) in annual fraud costs, the government unveiled a new strategy to tackle the issue, including the creation of 400 jobs focused on updating intelligence-led policing methods. Teaming up with telecoms regulator, The Office of Communications (Ofcom), the goal is to leverage technology to counter phone number “spoofing,” making it difficult for fraudsters to impersonate UK phone numbers.
Wire fraud has become a significant concern in the UK, now considered the most prevalent crime in the region with 1 in 15 people falling victim. To ensure better reimbursement for fraud victims, the government plans to implement laws requiring financial institutions to repay those affected by authorized fraud. However, it is reported that the country’s lenient regulations enable organized crime syndicates to use the UK as a base, allowing fraudulent companies to quickly register while gaining bogus credibility.
In recent times, efforts have been made by the UK government to restrict cryptocurrency companies from operating in the region. The UK Financial Conduct Authority (FCA) mandated all crypto asset companies to register with it under existing Financial Services and Markets Act (FSMA) rules for the digital assets market. Despite these requirements, many crypto-related businesses remain unregistered, as the FCA has adopted a stringent approach to approvals. This poses a challenge for the regulator to create a balance between ensuring a secure environment for investors and fostering innovation in the industry.
Prime Minister, Rishi Sunak, expressed his commitment to fighting scammers and protecting individuals from the despicable tactics employed by fraudsters. The government aims to put an end to methods like “SIM farms” that are commonly utilized by scammers to mass-target potential victims. Moreover, officials will review the use of mass-texting services to prevent these technologies from falling into the hands of criminals.
While the UK’s new strategy to combat fraud shows promise, it raises concerns about the extent to which regulations might stifle innovation and hinder the growth of the cryptocurrency market. Striking a balance between security and progress is undeniably a challenge for regulators and the industry alike.