Crypto observers give mixed response to Queen's Speech

By John Reynolds on Wednesday 11 May 2022

Alternative LendingDigital BankingSavings and Investment

One observer said he was “disheartened” that crypto regulation was not addressed, while another welcomed moves to crack down on crypto crime.

Crypto observers give mixed response to Queen's Speech
Image source: Cyber crime/Pixabay.

Crypto observers have given a mixed response to the Queen Speech, with one saying he was “disheartened” that crypto regulation was not addressed, while another welcomed moves to crack down on crypto crime.

The UK will introduce legislation to tackle illicit finance, Prince Charles said in the Queen's Speech.

Prince Charles said today (Tuesday): “A Bill will be brought forward to further strengthen powers to tackle illicit finance, reduce economic crime and help businesses grow. 

“Measures will be introduced to support the security services and help them protect the United Kingdom.”

While crypto was not directly mentioned by Prince Charles, the Economic Crime Bill will create new powers that will permit authorities to quickly seize crypto assets, which are used by fraudsters and used in ransomware attacks.

Currently, the authorities are relying on old laws to seize crypto assets.

Andrew Sackey, an expert at Pinsent Masons, the law firm, has said that authorities are reliant on money-laundering laws drafted in 2002 “when cryptocurrency was clearly not at the forefront of lawmakers’ minds”.

In February this year, the UK tax department seized three non-fungible tokens (NFTs) as part of an investigation into a suspected VAT fraud scheme involving 250 fake companies, marking the first time it has seized NTFs.

But Dan Moczulski, managing director at social investment network eToro, said it was disheartening to hear no mention of crypto regulation in the speech.

He said: "We were disheartened to hear no clear mention of crypto regulation in today's Queen's Speech as there is a real need for clarity. In recent months key government officials have made welcome comments as to positioning the UK as a global hub for crypto, something eToro firmly supports. 

“However, this is in stark contrast to the experience of firms in this space when interacting with the FCA. There is a need to bridge this disconnect and provide precision on crypto's place in the UK's financial services landscape.
 
"We are urging the government to provide a regulatory framework that enhances consumer protection without discouraging retail investor participation or stifling growth and innovation."
 
But Neil Williams, deputy head of complex crime at Reeds Solicitors, said the move on seizing crypto assets is welcome.

He said: "The authorities are slowly waking to the fact that the crypto markets are here to stay, with regulatory changes being brought into force to bring the market into mainstream focus.  

“Those who invest in crypto assets legitimately will be pleased to hear that powers to seize assets are to be enhanced, as many who find themselves victims of scams or frauds are frustrated by the time it takes to recover property which can disappear in the blink of an eye.”

Overall, the Economic Crime Bill aims to protect the UK’s finance system and give authorities more powers to suppress illicit finance in the UK, including driving out “dirty money” from criminals, terrorists and backers of Vladimir Putin.

The wide-ranging bill will also give Companies House fresh powers to clamp down on those who are suspected of registering firms fraudulently.

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