The Bank of England’s governor has issued a warning about a rising tide of fraudsters using crypto scams to dupe people out of their savings.
Andrew Bailey today said that while digital assets open up possibilities for financial innovation crypto is also “an opportunity for the downright criminal”.
“Cryptocurrency is the new front line for scammers,” said Bailey at the Stop Scams Conference in London today.
“You only have to ask the question: What do people committing ransom attacks usually demand payment in? The answer is crypto.”
UK financial regulators are placing increased scrutiny on crypto amid widespread adoption, with an estimated 2.3m Brits now in possession of digital assets. The use of crypto for financial crime is a major concern with the UK’s financial watchdog receiving 6,372 reports of digital asset scams last year, more than double the figure for 2020.
Jessica Rusu the chief intelligence, data and information officer for the Financial Conduct Authority today said digital assets and their underlying technology are an “area of growing attention”, for the watchdog.
The FCA is launching a CryptoSprint initiative in May which will bring together firms from across the financial services industry to inform the regulator’s policy approach to crypto.
The comments come as the UK’s finance sector awaits fresh guidance on digital asset regulation from HM Treasury, with the Chancellor reportedly planning to make an announcement on digital asset regulation later this month.
The Bank of England has repeatedly called for a framework to regulate digital assets stating concerns that the $2.1 trillion global crypto market could soon pose a risk to financial stability. The possible use of crypto for sanctions evasion amid the conflict between Russia and Ukraine has also added urgency to calls for regulation.