BOE’s Andrew Bailey Says Crypto Is the ‘New Front Line’ for Scams

04/04/2022

1 minute read

2022.04.04 16:16

BOE’s Andrew Bailey Says Crypto Is the ‘New Front Line’ for Scams
© Bloomberg. A customer selects Bitcoin for purchase on the screen of a cryptocurrency automated teller machine (ATM) in Barcelona, Spain, on Wednesday, March 9, 2022. Bitcoin dropped back below $40,000, erasing almost all the gains sparked by optimism about U.S. President Joe Biden’s executive order to put more focus on the crypto sector.

(Bloomberg) — Cryptocurrencies are the new “front line” in criminal scams that regulators are trying to prevent, Bank of England Governor Andrew Bailey said.

Speaking at a “Stop Scams” conference organized by the U.K. central bank, Bailey said that the underlying technology of crypto is contributing a good deal of innovation to financial services, but also created an “opportunity for the downright criminal.”

“You only have to ask the question: What do people committing ransom attacks usually demand payment in? The answer is crypto,” he said.

The U.K.’s financial regulator, the Financial Conduct Authority, last week extended a deadline for its approval of crypto operations. That gave a dozen firms more time to get their applications or affairs in order. So far, 33 have been approved for permanent registration with the FCA, which allows them to continue providing cryptocurrency services from within the U.K. after April 1.

Despite the extension, the crypto industry has warned of an impending exodus of companies moving their operations abroad if they could not gain FCA approval, which requires them to meet strict U.K. anti-money laundering rules.

Still, Bailey lamented that some cryptocurrency users act as though national rules do not apply to them.

“Some crypto enthusiasts say they shouldn’t be covered by Russian sanctions because that’s not their world,” he said. “I’m sorry, it is your world. We’re all in the same world.”

He called on banks, tech companies, and government institutions to work with the BOE to tackle scams against consumers, which he acknowledged was a job that “will never be done.”