There is always a sample size which has fallen victim to possible scams around the world. Many learn from the experience and it’s a few who offer inspiration to others so that they do not fall prey to something similar. UK has been one of the prime areas whereby several clients have fallen victim to online scammers.
- One individual was blackmailed to sending across £5,000 in Bitcoin after he was trapped of sending photos to a woman he had met online
- A South African gang trapped an elderly woman through operating a ‘trading programme’ fraud to the tune of £18,000
Considering such instances, Neil Liversidge who is the Managing Director of a Financial Solution firm in UK has launched a petition to end the cryptocurrency transactions in the UK. He is quite aggressive on his opinion and has termed Cryptos as a con in its absolute sense of the term. Liversidge is adamant to take such scammers by their horns and completely eliminate them out of the system.
The Institute of Financial Accounts (IFA) is hopeful the petition will encourage the UK government to act in banning cryptocurrency transactions across the UK.
Avenues to Prevent Mishaps
In his personal experience Liversidge stated that most of the scammers manipulate their languages in such a manner as if they are selling something unique and genuine. For e.g. new cryptos are launched using the jargon of ICO’s (Initial Coin Offerings) which sounds similar to an IPO. Such tactics can attract legitimate private companies towards the public markets.
The main difference is that firms come to the markets with a prospectus signed off by the lawyers, bankers and accountants with years of experience and balance sheet data. Cryptos on the other hand come to the market with practically nothing.
- In late 2020, the Financial Conduct Authority (FCA) had completely banned the retail sale of crypto derivatives amid concerns of volatility, valuations and the existence of financial crime in the market
- Neil Liversidge’s own firm now requires a guarantee from every fund manager stating that they will not purchase cryptocurrency. This will ensure that there is no remote possibility of anyone falling victim to any kind of scams.
Post a period of detailed consultations with the regulators, it was accepted that unregulated transferable crypto assets possess no inherent value and are poorly understood by the retail investors. These audiences have no ‘legitimate investment need’ to access the products. There is also less likelihood of any Financial Services Compensation Scheme or Financial Ombudsman Service Protection to prevent the interests of the wider audience.
Imposing a complete ban seems to be adverse reaction and will not go down well with the handful of investors who are currently pumping in large amounts of money. Though complete elimination will prevent from any kind of mishap and plug any loopholes in the legal regulatiors, a genuine opportunity to multiply money is getting lost.
Hence, a careful decision has to be taken considering all the pros and cons and the fact that cryptocurrencies are here to stay in the long run across various economies.
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