Cryptocurrency crooks under threat of international crackdown

Published:  2 May at 6 PM
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As reports of cryptocurrency connections to organised crime, fraud and duping of inexperienced investors begin to surface on the web, international regulators are preparing to get tough.

Due to the popularity of speculating in cryptocurrencies, it’s no surprise the bad and the ugly are now taking advantage of the good and the inexperienced, with moves now underway in EU countries, the UK, USA, Japan and South Korea to drive cryptocurrency crooks off the internet. According to international financial regulators, the currencies themselves aren’t the problem – it’s the sharks having a feeding frenzy on innocent investors due to a lack of control.

Regulators’ aims are to become, yet again, champions of consumer investors’ rights by stopping the activities of unprincipled crooks aiming to rip off newcomers to the cryptocurrency game before they can learn the rules. In general, financial companies are in favour of attempts to shut down dodgy operators in the new investment sector, and are warning of potential risks as well as helping identify those breaking the rules in what has been a totally unregulated vacuum.

Most agree that what is needed is a robust, fully international regulatory framework covered by ongoing supervision, especially in countries favoured by expat investors who may have little knowledge of the market. The UK’s Financial Conduct Agency is to publish a market review by later this year, with South Korea’s financial watchdog already focusing its plans for self-regulation of the sector. The Swiss watchdog is now treating a few offerings as securities and Spain is now drafting new laws to attract blockchain companies to the country. One way to secure the sector against misuse is to regulate the exchanges dealing with cryptocurrencies, in that routing flows through regulated exchanges will make identifying money laundering and other illegal activities far easier to detect.
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