UK court orders crypto exchanges to release fraudsters’ data
The High Court has ordered a number of crypto exchanges to reveal the personal details of some of their users after fraud was discovered.
These hackers moved millions of pounds into cryptocurrencies such as Bitcoin, Ripple, and Ethereum.
The exchange, which has not been named to prevent fraudsters from being warned, worked with the Metropolitan Police’s cybercrime unit, then a crypto-tracing expert, to try to locate the assets.
However, in order to continue the investigation, the exchange needed more information, the request of which was granted by the High Court.
Six exchanges have therefore been ordered to hand over the names, bank accounts and bank details of some people suspected of fraud.
Vanessa Whitman, a partner at law firm CMS, said the case is significant because it outlines the attitude of the English courts towards crypto fraud.
“While the practical difficulties of recovering stolen crypto assets remain, the decision in this case demonstrates the continued willingness of the English courts to use the tools at their disposal and, if necessary, offer solutions to help victims of fraud,” she said.
The case comes after figures from Action Fraud, the UK government’s national reporting system for fraud and cybercrime, showed that the amount lost to crypto fraud increased by 32% Last year.
Hinesh Shah, senior partner at Pinsent Masons, said that despite the recent fall in cryptocurrency prices, the association of cryptocurrencies with huge windfall profits continued to attract investors who lack the skills. and experience necessary to distinguish a legitimate investment in cryptocurrency from a fraudulent investment.
There are also concerns that scammers will proactively target these inexperienced investors.
Shah added, “Given the huge sums that some crypto investors made during the boom, scams involving cryptocurrencies can be particularly powerful for small investors who can desperately make a quick buck.”
Regulators and the government have yet to determine if they should regulate crypto, and if so, how.
Some have said that the sector should not be regulatedbecause it would further legitimize an industry that poses no threat to financial stability and is inherently a risky investment.
However, last month a Deputy Governor of the Bank of England warned that crypto needs to be regulated to protect financial stability.
Jon Cunliffe, Deputy Governor for Financial Stability at the Bank of England, said experience over the past year has demonstrated that crypto is not a stable ecosystem.
This is partly because its foundation is “completely unbacked instruments of extreme volatility” that can swing wildly in value, he said.
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