Category: United Kingdom

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Crypto News Regulation Stablecoins United Kingdom

Bank of England Agrees to Rescue Collapsed Stablecoins, Protecting Holders

In the wake of the Terra ecosystem collapse, the UK’s financial and economic ministry, HM Treasury, has released a consultation paper on systemic failures within what it terms “digital settlement assets including stablecoins”. Its recommendations have taken some by surprise.

Managing ‘Systemic Failures’

As per the consultation paper, HM Treasury has announced that the Bank of England (BoE) would intervene to direct and oversee collapsing stablecoins if, in its judgement, a stablecoin issuer has “reached a system scale fail”.

The government considers that it is important to ensure existing legal frameworks can be effectively applied to manage the risks posed by the possible failure of systemic DSA [digital settle asset] firms for the purposes of financial stability.

HM Treasury consultation paper

The document prepared was delivered in response to a consultation process in relation to the entire crypto sector which began earlier this year and concluded last month.

Government Offices Great George Street.jpg
HM Treasury offices. Source: Wikipedia

The British government is reportedly keen to amend prevailing financial legislation in order to bring crypto under the jurisdiction of the BoE, including instances where specific stablecoin issuers reach financially precarious positions.

Interestingly, the paper suggests that the revised rules would apply in in the case of stablecoins and “might include – but [are] not limited to – the issuer of a stablecoin, a wallet, or a third-party service provider”.

The government clarified that the central bank would intervene in the event of a “systemic collapse”, defined as “deficiencies in a system’s design or disruption to its operation [that] may threaten the stability of the UK financial system or have significant consequences for businesses or other interests”.

Broad Powers to the BoE May Flow On

At this early stage, the nature and extent of the central bank’s powers are largely unclear. However, on a closer inspection of the language used throughout the consultation paper, it’s evident that HM Treasury is looking to offer the BoE the broadest possible powers given the proliferation of references to “direction” and “oversight”.

While the UK has thus far proved to be crypto-friendly, one of the main concerns flowing from the USDT/LUNA fiasco was fears of increased regulation. It now appears that such fears were warranted given this latest move by the British government. One should probably expect the other G7 nations to imminently follow suit.

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Bitcoin Crypto News Scams United Kingdom

Police Seize 48 BTC from 16-Year-Old Kid Who Ran Copycat Website of ‘Love2Shop’

Police in the Midlands county of Lincolnshire in the UK have seized US$2.9 million in bitcoin from a 16-year-old boy who scammed thousands of victims after extracting their personal details via a copycat website.

Just as Covid lockdown restrictions were imposed in Britain last year, the teenager launched a fraudulent copy of Love2Shop, a gift voucher platform. He then used Google Advertising to heighten the website’s profile, prompting unsuspecting consumers to visit his page instead.

Victims Numbered At Least 12,000

From here, many victims unwittingly entered their email addresses and passwords, enabling thefts to take place. A police investigation uncovered more than 12,000 credit card numbers on the teenager’s computer, as well as 197 PayPal accounts.

In the meantime, his fake vouchers had spread far and wide, as police issued warnings to retailers to be on the lookout for them:

The court was told the teenager took the site down after a week, just as Love2Shop began investigating following a complaint from a customer.

Ill-Gotten Gains Sunk into 48 Bitcoin

The scammer, who cannot be named due to his legal status as a minor, had invested much of his ill-gotten gains into cryptocurrency, and detectives were stunned to discover he had a balance of 48 bitcoin, worth almost US$3 million at the time of writing.

The teenager, currently studying for his final school exams, admitted to charges of money laundering and fraud committed in April 2020. He was sentenced to 150 hours of community service with no conviction recorded, and a confiscation order was imposed on his crypto.

In a masterful example of stating the glaringly obvious, Judge Catarina Sjolin Knight told the defendant: “You have a long-standing interest in computers. Unfortunately, you used your skills to commit a sophisticated fraud.”

Later, she said: “If he was an adult he would be going inside.”

In August, Crypto News Australia reported on how fake crypto trading websites were proliferating in Australia.

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Blockchain Europe Google United Kingdom

Decentralised Search Engine Becomes Default Option for EU Android Devices

Decentralised search engine Presearch (PRE) has officially been added to Google’s default browser choice screen for all UK and European Android devices.

Fair Play Among Browsers

After receiving a €4.24 billion (A$6.8bn) fine from the European Commission in 2018 for using the Android operating system to solidify its place as the most used search engine in the world, Google stopped requiring competing search engines to pay in order to get on the default settings page.

In 2019, the agreed changes were that the five most popular and eligible search engines (including Google) in each EU country would be displayed in random order at the top of the Android choice screen, conforming to metrics from StatCounter.

Nearly 70 percent of smartphone owners in Europe use the Android operating system, which means there is strong potential for the search engine to grow its user base.

With potentially hundreds of millions of users just a click away on the search choice screen, this is one of the biggest wins for any project within the crypto space.

Colin Pape, founder, Presearch

What is Presearch? 

Presearch operates its own advertising platform that uses Keyword Staking, which allows advertisers to stake PRE tokens to a specific word or term. Whichever advertiser stakes the most tokens to a given keyword has its ad show up when someone searches that term.

With more than 2.3 million registered users, Presearch is one of the world’s top 10 most-trafficked blockchain websites and one of the fastest-growing alternatives for private, unbiased searches. Competing with Brave, Presearch aims to join the decentralised service landscape and provide users with a privacy-centric search engine.

Presearch currently processes more than 1 million searches per day and the company says daily searches have increased more than 300 percent since January 2021. The searches are processed by Presearch node operators that earn PRE for their efforts on the Ethereum blockchain.

PRE Token Up 80% Amid Announcement  

PRE tokens are currently trading at A$0.20, having shot up just over 100 percent in the past seven days. The project has a total market capitalisation of nearly US$74 million.

Presearch(PRE) Price: Coinmarketcap

With Android running on about four-fifths of the world’s smartphones including hundreds of millions in Europe, we see this as a huge win in taking decentralized services and blockchain mainstream and driving mass adoption.

Colin Pape, founder, Presearch
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Crypto News Cryptocurrencies Regulation United Kingdom

50+ Crypto Companies Withdraw Licence Applications Amid UK Crypto Regulation Fears

More than 50 crypto companies have withdrawn their applications to conduct business in the UK due to demanding requirements set by the Financial Conduct Authority (FCA).

Applicants Not Up to Scratch?

Early in June, the FCA released a report concerning a “significantly high number” of crypto firms that had been warned for not meeting anti-money laundering (AML) standards. This legislation is intended to stop criminals from hiding money used for or gained from criminal activities.

A significantly high number of businesses are not meeting the required standards under the Money Laundering Regulations. This has resulted in an unprecedented number of businesses withdrawing their applications.

FCA

Only 5 crypto asset firms have been admitted to the FCA’s formal register so far. They reportedly had 90 pending registration requests, of which 51 had withdrawn in early June and another 13 have since followed suit.

The FCA had previously issued a notice to UK consumers to inform them there were 111 unregistered crypto companies operating in the country.

Registration Period Extended

At the start of the new year, it was announced that companies that failed to meet the FCA’s AML requirements would be forced to refund all customer deposits and stop services until they could comply with the requirements set up by the regulatory agency.

The FCA has extended the temporary registration regime to 31 March, 2022. This allows businesses that have applied for registration to continue operations while awaiting the outcome of the assessment.

Additionally, there are schemes in the UK that help investors if a company were to go bust, but these don’t apply to those in the crypto industry. This law could possibly sway investors against putting their money in crypto.

It is unlikely that consumers will have access to the Financial Ombudsman Service or Financial Services Compensation Scheme, irrespective of whether a firm has temporary or full registration.

FCA

In January 2020, the FCA became the official AML regulators for the UK’s crypto market. The FCA has since taken action against some major platforms, including Binance. Apart from regulators in the UK and Japan, Canadian authorities have also issued warnings to Binance.

Binance must cease any financial promotions in the UK, but in the meantime its trading services have not been affected.

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Bitcoin Crime Crypto News United Kingdom

UK Police’s Biggest Ever Crypto Seizure: £114 Million

London’s Metropolitan Police have impounded the equivalent of US$160 million in cryptocurrency as part of a money-laundering investigation, to date the largest haul of its kind in Britain and one of the largest in the world.

Police would not specify which cryptocurrencies were intercepted, but revealed the operation was carried out by its Economic Crime Command team in connection with money-laundering offences.

The Met’s Deputy Assistant Police Commissioner Graham McNulty spoke to Britain’s Sky News of the link between money and violence and how the latter is used to protect criminal profits and maintain control of territories.

Cash remains king, but as technology and online platforms [continue to] develop, some [criminals] are moving to more sophisticated methods of laundering their profits. But we have highly trained officers and specialist units working day and night to remain one step ahead.

Graham McNulty, Deputy Assistant Commissioner, London Metropolitan Police

Detective Constable Joe Ryan added: “Criminals need to legitimise their money, otherwise it risks being seized by law enforcement.”

The proceeds of crime are almost always laundered to hide the origin, but by disrupting the flow of funds before they are reinvested, we can make London an incredibly difficult place for criminals to operate.

Det. Const. Joe Ryan, London Metropolitan Police

New Record in Crypto Misappropriations

The global record in crypto seizures once belonged to dark web marketplace Silk Road and its founder Ross Ulbricht when in 2020 the US Department of Justice recovered US$1 billion in stolen Bitcoin. But that amount is dwarfed by the US$3.6 billion in Bitcoin that’s gone missing following the disappearance earlier this month of the Cajee brothers who founded a cryptocurrency investment platform in South Africa.

Closer to home, in February, NSW Police arrested the head of a multimillion-dollar money-laundering syndicate after stopping his car in Sydney’s inner west and finding AU$1 million cash on board.

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Banking Crypto News Institutions United Kingdom

UK is Launching a Taskforce to Study a Potential Digital Pound

UK is Launching a Taskforce to Study a Potential Digital Pound

The government of the United Kingdom (UK) is launching a taskforce to explore the concept of central bank digital currency (CBDC). Following a report on Monday, the UK now adds to the list of major countries studying a potential digital currency.

We’re launching a new taskforce between the Treasury and the Bank of England to coordinate exploratory work on a potential central bank digital currency (CBDC).

Rishi Sunak, British Finance Minister

UK Becomes Another Country Researching CBDC

The Bank of England (BoE) and the country’s Treasury will spearhead the new initiative, according to Sunak. They will drive the taskforce towards researching the benefits of launching a national digital currency. However, the UK has no immediate need to launch a digital currency, which the finance minister touted as “Britcoin”.

The Government and the Bank of England have not yet made a decision on whether to introduce a CBDC in the UK and will engage widely with stakeholders on the benefits, risks and practicalities of doing so.

Bank of England

The CBDC Taskforce also said consumers and businesses in the UK would use the digital currency alongside physical cash. This means the digital currency won’t replace the Pound Sterling and bank deposits outright.

Interest in CBDC is Rising Globally

Many central banks in the world are beginning to research the possibility of launching the digital version of their national currency in the form of CBDC. This follows the growing interest in digital currencies for payment, seemingly propelled by the outbreak of the coronavirus pandemic.

Crypto News Australia recently reported that the Reserve Bank of Australia (RBA) intended to launch a wholesale CBDC. The RBA said it didn’t see any strong case for issuing a retail CBDC.