While crypto has led to innovation in financial services, it has also become the new “front line” for scams and an “opportunity for the downright criminal,” the Bank of England’s governor said today.
“You only have to ask the question: What do people committing ransom attacks usually demand payment in? The answer is crypto,” Andrew Bailey, the Governor of the Bank of England, said at an anti-scam conference organized by the U.K. central bank, according to Bloomberg.
Bailey has been skeptical about crypto previously. In November, during an address at Cambridge University, he spoke about his worries about El Salvador adopting Bitcoin as a national currency, according to Bloomberg.
“It concerns me that a country would choose Bitcoin as its national currency,” the governor said. “What would worry most of all is, do the citizens of El Salvador understand the nature and volatility of the currency they have?”
Bailey’s comments come as the U.K. financial watchdog, the Financial Conduct Authority, considers the applications of crypto firms seeking to register with the regulator. Last week, the FCA extended the registration deadline beyond the original cutoff of March 31.
Crypto firms operating in the country must register with the FCA under money laundering regulations. More than 100 crypto companies have applied since 2020, but only 33 have met the anti-money laundering standards to be fully registered, and therefore can continue to operate in the country after April 1.
Several scams have plagued the crypto industry recently. Last week, in possibly the biggest crypto theft to date, hackers stole about $622 million from the blockchain-based gaming network used by the play-to-earn game Axie Infinity. In a separate hack targeting the stablecoin, Cashio, a hacker some dubbed “Crypto Robin Hood” stole $50 million and then returned the stolen funds only to those that lost less than $100,000.
Speaking at the anti-scam conference Bailey called on government institutions and private industry alike to help prevent scams on consumers. Still, he said the job of preventing scams “will never be done.”
