Bad Actors Pushed Out Of the Cryptocurrency MarketOctober 7, 2019
Facebook’s Libra is now discussed as a controversial digital currency project, of which PayPal is the first to pull out. PayPal is one of the 27 to 28 multinational and non-profits who were backing the Libra.
This has happened due to the second thought of PayPal being involved with Facebook. PayPal stated, “We remain supportive of Libra’s aspirations and look forward to continued dialogue on ways to work together in the future. Facebook has been a longstanding and valued strategic partner to PayPal, and we will continue to partner with and support Facebook in various capacities.”
The French government has already stated that they will be blocking the development of PayPal in Europe. Regulators are scrutinizing Libra as this project is considered to be one that is bypassing rules on topics related to money laundering and tax evasion.
None of the multinationals have officially joined, and most of them are only involved provisionally.
The Financial Conduct Authority in the UK has estimated that nearly £27m in crypto and foreign-exchange scams have contributed to the loss of its citizens. There are more than 87 inquiries on its books so far. Some of them are in their earliest stages of investigations, and some are in full-blown investigations.
When talking about the increased scrutiny of the FCA, David Heffron, partner at a law firm, stated, “Reflects the FCA’s increasingly hands-on and no-nonsense approach to enforcing the law in the cryptocurrency market.”
The current activity of the FCA would be encouraging for those who are already acting lawfully, and the bad actors will be pushed out of the cryptocurrency market.
A lot of getting rich schemes are hitting the market, and the FCA is, therefore, working on a tight line with cryptocurrency companies who are offering products in public.
Most of the scams have fake celebrity endorsements; pictures of luxury items are used to attract people via social media. The websites are designed in a professional-looking manner. False promises with higher profits are made. Most of the victims are middle to upper-class men who have aged anywhere from 20 through 44.
Cryptocurrency transfers and purchases are not regulated in the UK by the Financial Services Compensation Scheme if things should go wrong as they are not regulated. Since it is not possible to value them reliably and since trading in cryptocurrency-based derivatives is similar to gambling, the UK Watchdog has announced that the derivatives would be banned. This is due to the widespread impact of financial crime.