UK Government Takes Aim at Crypto Fraud: New Laws and Strategies

The UK government is gearing up to implement new legislation to reimburse victims of authorized cryptocurrency fraud while collaborating with Ofcom to combat phone number “spoofing.” These measures are part of a broader effort to suppress financial fraud, including cold calls peddling insurance and cryptocurrencies. According to the National Crime Agency, such incidents cost the country approximately £7 billion ($8.7 billion) annually.

400 New Jobs and Enhanced Policing

In response to the rising threat of fraud, the UK government unveiled its new fraud strategy, committing to the creation of 400 new jobs to modernize its approach to intelligence-led policing. In addition, to tackle phone number “spoofing,” the government will join forces with the telecoms regulator, the Office of Communications (Ofcom), employing advanced technology to prevent fraudsters from imitating legitimate UK phone numbers.

Bloomberg reports that wire fraud has become the most widespread crime in the UK, with one in every 15 individuals falling victim. To better protect citizens, the government intends to introduce legislation mandating financial institutions to compensate victims of authorized fraud.

A recent report highlights that organized crime syndicates increasingly use the UK as their base of operations. Criminals take advantage of the region’s lax regulations. For example, the low cost of registering a company in the UK (£12 or $14.85) and the lack of identification requirements allow fraudulent companies to establish themselves, thereby quickly acquiring a veneer of credibility.

UK Financial Conduct Authority’s Crackdown on Crypto Companies

The UK government has been working diligently to regulate cryptocurrency companies within its borders. The UK Financial Conduct Authority (FCA) requires all businesses engaged in crypto asset activity to register with the agency in compliance with the Financial Services and Markets Act rules applicable to the digital assets market.

However, the FCA’s rigorous approach to granting approvals has resulted in numerous crypto-related businesses operating as unregistered entities. The regulator strives to balance providing a secure environment for investors and fostering innovation within the industry.

Rishi Sunak’s Statement and the Fight Against Scammers

UK Prime Minister Rishi Sunak has publicly condemned scammers, stating they “ruin lives in seconds, deceiving people in the most despicable ways to line their pockets.” He pledged to combat these criminals wherever they attempt to hide. 

The government has also vowed to put an end to strategies commonly employed by scammers to target large numbers of people simultaneously, such as “SIM farms.” Moreover, the use of mass-texting services will be subject to review to prevent these technologies from falling into criminal hands.

The UK government’s commitment to combating crypto fraud and financial scams reflects the urgent need to protect citizens and investors from the devastating consequences of these crimes. 

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