The “pig butchering” scam is not new but has enjoyed a rapid rise in recent years.  So much so, that virtually everyone reading this blog will have been an intended mark at some point, probably without knowing it.  Indeed, if you have ever received a message from an unknown number with a random message that apparently wasn’t intended for you such as “sorry I missed my appointment” or “Hi mum, this is my new number” then that probably wasn’t an innocent mistake, it was the start of the long con of the 2020s.  The pig butcher scam generally starts online, through social media, or ..read more

In what is widely touted as the first of its kind in the UK, a recent order made in D’Aloia v Persons Unknown & Others by the High Court marks an expansion of the potential methods for service of claims permitted for English proceedings, by allowing proceedings to be served via airdrop of Non-Fungible Token (NFT). The decision marks a useful step forward for victims of fraud in the crypto-asset space. Background to the claim In overview, the claimant, Mr Fabrizio D’Aloia, made deposits of cryptocurrencies (USDT and USDC) from his pre-existing wallets to the wallets of persons unknown, oper ..read more

On 14 July FCA CEO Nikhil Rathi gave a speech at the Peterson Institute for International Economics, setting out a helpful overview of the FCA’s intended future approach to its aspects of its regulatory responsibilities. In addition to emphasising cross-border co-operation, Mr Rathi elaborated the following focus areas: The Regulatory Landscape: Mr Rathi suggested that the FCA may diverge from the EU’s regulatory landscape to, among other things, bolster global reach of the UK’s wholesale markets. Proactive Approach: The FCA will pursue a more proactive approach. Apparently the FCA have be ..read more

The FCA has stressed recently that it expects the cryptoasset sector to play its part in ensuring that Russian sanctions are complied with, and highlighted that the financial sanctions regulations do not differentiate between cryptoassets and other forms of assets. The use of cryptoassets to breach or circumvent economic sanctions is a criminal offence under the Money Laundering Regulations 2017 and regulations made under the Sanctions and Anti-Money Laundering Act 2018; most notably the Russia (Sanctions) (EU Exit) Regulations 2019, as amended. In addition to steps taken to identify customer ..read more

The FCA has been increasingly interested in cryptoassets as their use in the UK has grown. In October 2018, the FCA published a joint report alongside the Bank of England and the Government as part of the UK Domestic Taskforce on Cryptoassets. In March 2019, the FCA commenced research into consumer attitudes and awareness of cryptoassets and following the joint report and the FCA’s research, the Government made a pledge in its March 2020 Budget that it intended to consult on measures to bring certain cryptoassets into the scope of financial promotions regulation. The joint Taskforce Report pro ..read more

A group of underwriters, called Atrium (Lloyd’s syndicate for Coincover) have developed a £100,000 policy in response to a surge in reports of the hacking of cryptocurrency accounts. According to Lloyd’s, the policy has a “dynamic limit” that increases or decreases in line with the price changes of crypto assets. This means that the insured will always be indemnified for the underlying value of their managed assets even if this fluctuates over the policy period. Industry concerns Around three-quarters of investors cite theft as their main fear of digital currencies, according to a survey by A ..read more

The English Court has now made a clear ruling; “I consider that cryptoassets such as Bitcoin are property“, Bryan J concludes in his judgment in AA v Persons Unknown. The Court has granted another interim injunction over Bitcoin, this time held in an account of a cryptocurrency exchange after it had been transferred to the exchange as part of a cyber-attack on a Canadian insurance company. Unlike the previous cases, which only act as persuasive authority on the matter (such as the one in our previous blog post), the Court here fully considered the issue of whether cryptocurrency is prope ..read more

The recently reported High Court decision in Vorotyntseva v Money-4 Ltd (T/A Nebus.com) shows that freezing orders can cover Bitcoin and ethereum cryptocurrency. It is another example of the Courts finding that a cryptoasset is a form of property capable of being the subject of a Court order.  The case was heard in 2018, but the judgment was only published last week. Facts The claimant, Elena Vorotyntseva, had given what equated to about £1.5m of bitcoin and ethereum cryptocurrency to Nebeus to test its trading platform. Ms Vorotyntseva then started to become concerne ..read more

The FCA has now published its Final Guidance on Cryptoassets (PS19/22), setting out the FCA’s position on how cryptoassets fit within the current regulatory perimeter. The Guidance does not change the scope of regulation of cryptoassets by the FCA, but does provide useful and practical insight into how the regime applies in the cryptoasset sphere which should assist market participants in determining the extent of their regulatory obligations where different cryptoassets are concerned. The Guidance has been finalised following a consultation on draft guidance issued at the start of the year ..read more

The Basel Committee on Banking Supervision has released a statement setting out its position on crypto-assets, becoming the latest in a line of supervisory and regulatory bodies to consider these assets. Its statement, considering the BCBS’s prudential expectations for banks’ exposure to crypto-assets echoes a number of themes set out last year by the PRA in its Dear CEO letter. We previously reported on that letter back in July 2018. The BCBS, like the PRA and FCA, does not consider it appropriate to refer to these assets as cryptocurrencies as they’re not fulfilling the criteria expected of ..read more