The UK government has been ramping up its efforts to combat fraud, which costs the nation over £7 billion ($8.7 billion) annually. In a recent move, the UK plans to ban “cold calls” related to insurance and cryptocurrencies to tackle fraudulent activities. To achieve this, the authorities will leverage intelligence-led enforcement and employ 400 new staff members for thorough implementation. This step involves the installation of new anti-spoofing equipment in collaboration with the telecommunications regulator, the Office of Communications (Ofcom).
UK Prime Minister Rishi Sunak stated that con artists “ruin lives, cheating people in the most despicable ways to line their pockets.” He even vowed to track down crypto scammers wherever they may be hiding. Furthermore, the government aims to prevent “SIM farms,” centers that criminals use to make mass contacts.
Victims of wire fraud are becoming increasingly common in the UK, with one in fifteen Britons affected in recent years. As a result, the government is considering introducing regulations requiring financial institutions to compensate the victims of sanctioned fraud. A study released on January 29th by the Bureau of Investigative Journalism and the Observer revealed that criminal organizations use the UK as a base mainly due to its lenient regulations. For instance, the registration of a business in the UK costs just 12 GBP ($14.85) and requires no identification, making it an attractive loophole for scammers.
In recent times, the British government has attempted to limit the operations of cryptocurrency-based businesses. The interested companies must first register with the Financial Conduct Authority (FCA) as per the Financial Services and Markets Act. However, as the FCA maintains stringent rules for approving crypto organizations, many businesses tend to operate under the radar.
The FCA now faces the challenge of striking a balance between protecting investors’ interests and nurturing innovation in the industry. While combating the misuse of the UK’s lenient regulations to facilitate fraud, the government must not stifle the creativity and problem-solving capabilities of businesses within the cryptocurrency sphere.