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UK's Financial Watchdog Issues Letter to Banks on Crypto Risks

Uk's financial watchdog issues letter to banks on crypto risks

UK's Financial Watchdog Issues Letter to Banks on Crypto Risks

Uk's financial watchdog issues letter to banks on crypto risks

The U.K.’s Financial Conduct Authority (FCA) has written to bank CEOs over the potential risks they face when dealing with cryptocurrencies.

As the British regulator for around 58,000 financial services firms and financial markets in the U.K., the FCA has issued formal warnings before on the risks of investing in cryptocurrencies.

In this latest warning, the FCA addresses the banks specifically and urges greater scrutiny of client and customer activities if they are deemed to be dealing in what the agency calls “cryptoassets.”

For bank clients who offer services to consumers in cryptocurrencies, appropriate steps to lessen the risk of financial crime include, “carrying out due diligence on key individuals in the client business” and “ensuring that existing financial crime frameworks adequately reflect the crypto-related activities which the firm is involved in.”

While acknowledging that not all businesses and individuals holding or trading in cryptocurrencies would pose the same degree of risk, the FCA did flag a few “high-risk” indicators. These include a client using a state-sponsored cryptocurrency, “which is designed to evade international financial sanctions” – presumably a hint that trading Venezuela’s petro token will get your account closed.

Another red-flag cited includes retail customers seen to send large sums to token sales, or initial coin offerings (ICOs). According to the FCA letter, these customers are at a “heightened” risk of investment fraud.

Not all motives for using cryptocurrencies are criminal in nature, it continues, but given the “potential anonymity and the ability to move money between countries,” the FCA expects financial firms to exercise “particular care” when dealing with cases involving cryptocurrencies.

City of London image via Shutterstock

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Published at Mon, 11 Jun 2018 15:35:10 +0000

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Bitcoin Through The Eyes of the World’s Most Respected Billionaires

In a recent article, The Motley Fool examines what billionaires Mark Cuban, Warren Buffett and Richard Branson have to say about bitcoin.

The Motley Fool’s Matthew Frankel writes that it can be a smart idea to listen to what some of the most successful people in the world have to say, and with that, he explores what three of the world’s most respected billionaires have to say about bitcoin.

While these are merely opinions, each brings with it a unique perspective and outlook on what is very much an emerging technology and a potentially disruptive threat to their empires.

Mark Cuban on bitcoin: The Cautious Take

Dallas Mavericks owner and investor Mark Cuban made news in the cryptocurrency world recently when he made the following tweet:

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Within hours of his tweet the price of Bitcoin fell, he then tweeted:

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While this does highlight the volatility of the bitcoin, it also brings attention to just how sustainable the coins current high price is. However, Cuban does have a great enthusiasm for the underlying technology of the blockchain.

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Warren Buffett on bitcoin: The Dismissive Take

Warren Buffett

In a 2014 CNBC interview, American business magnate and investing giant Warren Buffett dismissed bitcoin claiming that it was a technology essentially devoid of value. During the interview, Buffett offered this advice to readers:

Stay away from it. It’s a mirage, basically…The idea that it has some huge intrinsic value is a joke in my view.

Many dismissed his comments, however, since Buffett has avoided investing in new technology throughout his career, admitting that he does not understand them well enough to invest. A cautionary lesson in research there. However, Buffett’s comments did not sit well in the tech industry where he received condemnation for his criticisms. Tech venture capitalist Marc Andreessen echoed the sentiments of many in the tech industry:

The historical track record of old white men crapping on new technology they don’t understand is at, I think, 100%.

Buffett’s comments in regard to bitcoin and blockchain technology were made 3 years ago and it is entirely possible, if improbable, that his attitude has changed since.

Richard Branson on bitcoin: The Positive Take

Sir Richard Branson

Not only does UK tech billionaire Sir Richard Branson speak highly of bitcoin and blockchain technology, he also suggests applications for the technology in a socially beneficial way. Using the technology to create a better, more secure and forgery-proof land titling system is just one of the real-world applications Branson envisions. This would ideal for developing countries and places where corruption is rife, as land titles are regularly disputed.

Branson also holds annual Blockchain Summit events on his own private island where blockchain experts and developers, as well as the top minds across a wide range of industries, brainstorm new ideas and applications for the technology. Ultimately, his attitude towards bitcoin is that it is working, and working successfully. He does recognize, however, that there is room for even better solutions than bitcoin currently provides.

Have these Billionaires got the right idea about bitcoin? Should they be doing more like Richard Branson in promoting it and looking for active uses? Let us know in the comments below?

Images courtesy of Flickr, AdobeStock

The post Bitcoin Through The Eyes of the World’s Most Respected Billionaires appeared first on Bitcoinist.com.

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