Rising Cryptocurrency Ownership Prompts FCA
To Consult on Further Regulation

The FCA is developing a roadmap of key dates for a new regulatory regime. A series of focused consultations will follow, designed to engage with key stakeholders. Matthew Long, director of payments and digital assets at the FCA, said:

“Our research results highlight the need for clear regulation that supports a safe, competitive, and sustainable crypto sector in the UK. We want to develop a sector that embraces innovation and is underpinned by market integrity and consumer trust.

“We’re committed to working closely with the Government, international partners, industry and consumers to help us get the future rules right.”

Information for regulated financial firms was added to the FCA website in November 2024. It sets out the risks of providing services to unregistered crypto asset firms that are illegally promoting to UK customers.

An £11 million social media campaign called InvestSmart was rolled out in October 2021 to help consumers learn more about investing and risk, enabling them to make better-informed investment decisions that suit their individual circumstances.

The campaign has incorporated gamification to encourage consumers to ask 5 simple questions before making an investment decision:

1. Am I comfortable with the level of risk? Can I afford to lose my money?
2. Do I understand the investment and could I get my money out easily?
3. Are my investments regulated?
4. Am I protected if the investment provider or my adviser goes out of business?
5. Should I get financial advice?

The InvestSmart website includes extensive information on crypto assets to help potential investors understand the risks.

Commenting on the prospect of increased regulation, Sarah Spruce, Legal Director at TLW Solicitors, said:

“Many people see cryptocurrency as a novel and potentially easy way to make quick money. Unfortunately, digital currencies can be highly volatile and can decrease in value just as quickly as they increase. Where there are investments, scammers are never far away, and we have worked with many clients who have lost out to cryptocurrency fraud due to stolen crypto wallets, fake trading platforms or impersonation scams.

“Regulation of this industry is welcomed. Investors need peace of mind and proper recourse if things go wrong and they fail victim to crypto fraudsters or mis-selling. Whilst we wait for the rules to be tightened up, I would encourage anyone who has fallen prey to cryptocurrency related scams to get in touch with our specialist team – we can have a no obligation and confidential discussion to explore your options and determine if you may be eligible for a ‘no-win, no-fee’ refund claim.”

While the best course of action is to avoid crypto scams altogether, we recognise that scams have become very sophisticated in recent years and, sadly, people get caught out.

Many cryptocurrency scams involve Authorised Push Payment (APP) Fraud. This is where you are persuaded to transfer money from your bank account to the scammers using online banking. With many crypto scams, there is an intermediate step: money is sent to a crypto trading account in your name, under the scammer’s control. The scammer, who may be posing as a crypto adviser or trader, tells you they will invest the money in cryptocurrency on your behalf but instead fraudulently moves it to their own account, making it difficult to trace or recover.

TLW Solicitors has a team of APP Fraud specialists who can handle financial claims. We have extensive experience of actively pursuing claims with banks that allowed the payments to be made, as well as with the Financial Ombudsman Service (FOS). FOS is an independent body set up over 20 years ago to settle disputes between FCA regulated financial institutions and their customers.

While changes to APP fraud reimbursement were introduced on 7 October 2024, the new rules do not apply to all cases. We can undertake a free, no-obligation assessment of your case and advise on whether we think you have a valid claim. We work on a ‘no-win, no-fee’ basis, meaning that if your case is unsuccessful, we will not charge you for the time we have spent on it.