Problems related to advertising of financial scams resurface at UK Parliament
MPs want to make sure that Internet-based companies which take paid advertising know that they have to take their responsibility for protecting the public seriously.
The issue of the responsibility that online platforms have to take with regard to publishing ads paid by fraudulent companies like cryptocurrency scammers has resurfaced during a Debate in the House of Commons held late last week.
Jessica Morden, a Labour MP, raised the matter of the growing number of victims of financial scams that are heavily promoted via platforms like Facebook.
“My constituent Malcolm Richards was the victim of a financial scam advertised on the internet, losing £39,000 in a bitcoin scam that purported to be backed by members of “Dragons’ Den”. This is a similar issue to that raised by Martin Lewis in his challenge to Facebook”, Jessica Morden said.
She requested that a debate is held in the House of Commons to highlight such cases and make sure that internet-based companies that take paid advertising know that they have to take their responsibility for protecting the public seriously.
In response, Andrea Leadsom, a Conservative MP, confirmed that the problem of financial scams is persistent, and it seems that the scammers constantly find new ways to attack people.
“I encourage the hon. Lady to write to the Financial Conduct Authority on this point and to raise it at Department for Digital, Culture, Media and Sport questions on 10 May to find out what more can be done to ensure that these companies play their part in not allowing these scams to be put on to their platforms”, she said.
In April this year, the FCA published a statement on the requirement for firms offering cryptocurrency derivatives to be authorised. The regulator said it was aware of a growing number of UK firms offering so-called cryptocurrencies and cryptocurrency-related assets. Cryptocurrencies are not currently regulated by the FCA provided they are not part of other regulated products or services.
Cryptocurrency derivatives are, however, capable of being financial instruments under the Markets in Financial Instruments Directive II (MIFID II), although the FCA does not consider cryptocurrencies to be currencies or commodities for regulatory purposes under MiFID II. Firms conducting regulated activities in cryptocurrency derivatives must, therefore, comply with all applicable rules in the FCA’s Handbook and any relevant provisions in directly applicable European Union regulations.
The UK authorities retain their cautious stance regarding cryptocurrencies. Earlier this year, John Glen, Economic Secretary to the Treasury and City Minister, said that:
“The Government currently has no plans to recognise digital currencies as legal tender or to propose designating them as financial instruments”.
He had also clarified the stance of the Bank of England regarding digital currencies. He said back in February that the Bank does not plan to issue a central bank-issued digital currency.
On February 22, 2018, the UK Treasury Committee opened a new inquiry into digital currencies and distributed ledger technology (DLT). The inquiry aims to explore the role of digital currencies in the UK, including the opportunities and risks that digital currencies may generate for consumers, businesses, and the Government. It will also examine the potential impact of DLT – such as blockchain – on financial institutions, including the central bank, and financial infrastructure.
