How UK, US are collaborating to stop crypto frauds

The United Kingdom and the United States have often been considered as the leading countries when it comes to cryptocurrency adoption. While the UK is considered as a crypto and fintech hotbed in Europe, the US has the leading exchanges with their headquarters in major US cities.

But with the growth of crypto adoption also comes the risk of cryptos being used for illicit activities. The Internal Revenue Service's Criminal Investigations Unit (IRS) seized US$3.5 billion in 2021 from crypto frauds. IRS feels this number could be higher if cases increase, and in 2022, the number could skyrocket.

In the UK, the push to crypto adoption has brought in an increased number of crypto frauds. In October, the City of London Police revealed that crypto-related frauds in the UK in 2021 has accounted for losses of more than £146 million. This was roughly 30% higher than 2020's data. So, it is no surprise that both US and UK are joining hands to lead the charge to make illicit use of cryptos more stringent.

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A collaborative focus

According to the FBI, the volatile crypto market has given enough opportunities to hackers and scammers to steal the individuals’ money. This was one of the primary reasons why the US Securities and Exchange Commission chairman Gary Gensler has been harping for stringent regulations to ensure that investors money is safe.

Last week, the US Department of Justice's Deputy Attorney General Lisa Monaco had a long conversation with the UK Home Secretary Priti Patel in Washington D.C., indicating that they are joining forces to keep the scammers at bay. The meeting largely revolved around the threat perception and on possibilities that both the countries can jointly counter terrorism, cybercrime, and illicit finance. The US government, on their part, have kept a strict vigil on the ransomware attacks. In October, the authorities had joined forces with the Monaco government to start a National Cryptocurrency Enforcement Team to combat illegal activities.

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Global efforts

Countries around the world have been vigilant against the illicit use of cryptos. In China, the PBoC had banned cryptocurrencies. Bitcoin may have been launched as a legal tender, but the International Monetary Fund has constantly waged war against the use of bitcoin as the legal tender.

A more suitable form of central bank digital currency (CBDC) is gaining voices to curb the illicit use of cryptos. Many countries are already in the trial phase, with hopes that CBDCs would give them better control over the market. Besides, countries like the US, India, the UK, South Korea are all exploring regulations, and it is expected that regulations would bring some sense of reliability to the use of cryptos.

Very recently, in India, the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, was tabled to seek a ban on private cryptos, signalling that instead of banning the use of cryptos, governments around the globe should be more open to ensure that it is not being misused.

Conclusion

Countries around the world have been more stringent and aware of both the advantages and the risks around cryptos. Therefore, they need to work collaboratively to ensure that crypto frauds are kept in check and ensure more regulatory norms are in place to ensure that the investors don't lose their money due to untoward incidents.