UK regulators want to ban cold calls for financial services to consumers, and the crypto sector is likely to be one of those affected. This is part of the UK Treasury Fraud Strategy introduced in May to curb fraudulent activity in the country.
In a recent consultation paper published by His Majesty’s Treasury, the government has sought public input on the potential impact of a full ban on businesses. Interested parties are encouraged to provide their views and supporting evidence in this regard.
The consultation paper presented several case studies illustrating instances where scammers used cold calling to mislead investors. One of these cases specifically revolved around cryptocurrency.
While the identity of the individual was changed, this particular case revealed an investor’s unfortunate loss of £65,000 after being persuaded to invest in cryptocurrencies via a cold call.
The paper, citing data from OFCOM, states that 80% of UK landline users received suspicious calls between August and November 2022. These case studies and the increase in the number of suspicious calls thus further demonstrate the need to regulate cold calling.
“Cold calling for financial services and products has long been the tool of choice for fraudsters who try to manipulate unsuspecting individuals into scams, especially when targeting the most vulnerable,” the paper said.
Regulations regarding cold calling have proven largely ineffective, prompting a move towards a full ban. This ban covers a range of products and services, especially crypto-assets, banking, insurance, mortgages and various physical investments. However, exceptions will be made for cold calls when consumers give explicit and specific consent.
In recent months, several countries have intensified their efforts to combat cryptocurrency-related fraud. In Australia, leading banks have taken proactive steps, including suspending payments to high-risk crypto exchanges and implementing enhanced security measures to better protect their customers.
Meanwhile, Belarus is pushing legislation to ban decentralized exchanges and peer-to-peer trading, with the goal of channeling all cryptocurrency transactions exclusively through regulated exchanges.
The report that the UK Treasury sees the ban on cold calling impacting the crypto industry first appeared on CryptoSlate.