The chairman of the Financial Conduct Authority (FCA) has urged tech giants including Facebook and Twitter to rid their platforms of the rising number of online scams.
Cryptocurrencies | Rosenblatt’s Financial Crime Team
Charles Randell, who heads up the financial watchdog stated that social media firms are enabling criminals to lure unsuspecting investors, through adverts promoting crypto tokens. He noted that these tech giants must do more to stop these scams appearing on their sites.
Mr Randell also turned to Boris Johnson’s government urging ministers to incorporate financial harm in the Online Safety Bill forcing these tech firms to check the authenticity of their advertising customers.
Whilst speaking at the Cambridge International Symposium on Economic Crime, Mr Randell stated that, “Google has committed to stop promoting advertisements for financial products unless an FCA-authorised firm has cleared them.” He added that “‘we now need other online platforms – Facebook, Microsoft, Twitter, Tiktok – to do the right thing too. And we think that a permanent and consistent solution requires legislation.”
At present the Online Safety Bill does not cover paid advertisements, which is the main source of online scams. Despite this, Oliver Dowden, Culture Secretary has refused to widen the scope of the Bill.
Mr Randell noted that 2.3m Britons own some form of crypto-currency product with 14% having borrowed money to purchase them, leaving these individuals exposed to huge risks if the value of the digital asset plummets. This is compounded by the fact that 12%, or a quarter of a million people thought the FCA, or the Financial Services Compensation Scheme would protect them if their bets went wrong. Unfortunately, as Mr Randell has stated this is not the case because crypto products do not fall under the regulator’s scope.
For now, Mr Randell does not wish Parliament to put crypto assets under the FCA’s scope as it will mistakenly lead consumers to believe all such products are bona fide investments. Instead, Mr Randell requests the legislation is amended to allow the FCA to regulate crypto promotions and adverts.
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(Source: FCA slams tech giants Facebook and Twitter over online fraud – T-Gate (tech-gate.org))
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