Regulators have raised concerns after fresh data revealed increasing numbers of investors are betting big on crypto.
David Lindberg, who heads up Natwest’s retail arm, last week revealed one in five customers hold crypto, a greater proportion than have invested in stocks, The Times first reported.
Speaking at the Stop Scams UK conference in London last week, Lindberg said the popularity of crypto assets was “not a good thing for Natwest customers,” because of the risks posed by financial crime and a lack of regulation.
At the same event, Bank of England governor, Andrew Bailey, raised the alarm about the rise of digital assets, dubbing crypto the “new front line for scammers.”
Natwest has around 19m UK customers, meaning that around 3.8m account holders could be crypto owners, beating estimates by the UK’s financial regulator that 2.3m Brits hold digital assets.
Crypto boomed in popularity in 2021, when successive lockdowns drove retail investors to trade online or using mobile apps from the comfort of their own homes. Trading platform eToro, which has 27m active users, was a beneficiary of the influx of retail investors into the crypto markets.
“For many retail investors the crypto sector is now too compelling to ignore. Many of the most innovative investment opportunities in the world now come from the crypto space,” commented Simon Peters, a market analyst at eToro.
“Even the UK Government recognises this, with its recently proposed crypto strategy that aims to make the City of London one of the most competitive crypto hubs in the world,” Peters continued, referencing government plans to turn Britain into a “global hub” for digital assets.
The UK’s former Health Secretary Matt Hancock has also spoken out in favour of permitting widespread crypto adoption, even amongst retail traders.
A spokesperson for the Financial Conduct Authority said consumers turning away from traditional investment products for digital assets should be “prepared to lose all their money.”
“People need to remember that investing in cryptoassets is unregulated, which means they are unlikely to have protection if things go wrong,” a spokesperson for the Financial Conduct Authority said.
At the Stop Scams event, Lindberg called for “collective action,” to crackdown on financial crime. He also called for UK digital asset firms to agree to reimburse victims of fraud.