Law firm Addleshaw Goddard has today added its voice to growing calls to regulate the crypto market to combat growing levels of fraud highlighted in the recent Action Fraud report estimating it to be at £200 million from October 2021 to September 2022.
James Herring partner in financial disputes at Addleshaw Goddard said:
"Any fully comprehensive solution will likely need to involve co-ordinated regulation at the point of origin as well as at various touch points along the chain. In practice, this will likely require the involvement of a number of third parties including involving the crypto exchanges as well as the internet service providers through which the fraud often takes place."
Fraudsters are using a wide means of trying to steal crypto on the basis it is difficult to identify who is behind the fraud (in the belief they can't be traced or it is not cost effective to do so). For example, targeting individuals and trying to persuade them to invest crypto with them promising high returns – and the fraudsters simply running off with the crypto.
"Whilst the blockchain recording the transactions are visible for all to see – it does not record the identity of the persons or entity behind the fraud. As opposed to for example a more conventional type fraud where you might know who the fraudster is (or have a good idea) but you do not necessarily know where the stolen assets are now located. The English courts have been supportive in terms of taking steps to try to assist the victim of crypto fraud granting relief aimed at ways to try to uncover who is behind the fraud including in innovative ways - for example serving proceedings by way of an NFT on an unknown fraudster."