Letters: Regulations are needed to stop crypto fraud
[Re: Google searches for ‘Sell Ethereum’ up 972 per cent following crypto plunge, January 7]
Your article on the drop in value of Ethereum and its likely alignment to recent changes in crypto-regulation in China, highlights to me the need for multilateral regulation around cryptocurrency. This feels like a necessity if we are to protect consumers globally from rising crypto-fraud and to avoid market reactions such as this.
The currently fragmented approach is leaving regulators with limited options. Take the UK for example, most of the crypto market is unregulated and because most exchanges are registered outside the UK, the regulator here (the FCA) has limited powers to act. The most common tool they can currently deploy is to issue warnings against certain firms (as they did with Binance in June 2021).
The level of crypto fraud we are seeing, doubling for the fourth year in a row, as fraudsters find ways to take advantage of inexperienced investors is a strong call to action, particularly where vulnerable customers make up a disproportionately large percentage of the victims. If crypto investment continues to significantly rise in 2022, then regulation must stop fraud levels following the same pattern.
It’s time for the old rulebook to be thrown out the window and new solutions found to support this evolving and dynamic investment market.
Hinesh Shah