Diane Abbott voices Labour concerns over Bitcoin’s ‘gigantic Ponzi scheme’

Written by Emilio Casalicchio on 6 March 2018 in News
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Shadow home secretary suggests party would look to better regulate cryptocurrency

 

Credit: BBC Daily Politics

The Shadow Home Secretary said the party was concerned about terrorists and criminals using cryptocurrencies to fund their illicit activities and duck the law.

Fears have emerged that Bitcoin and other digital currencies like it could become the capital of choice for jihadist groups, money launderers and other offenders keen to stay below the radar. Drugs, weapons and child pornography are all said to be available in exchange for crypto cash using the so-called Dark Web.

Meanwhile, the WannaCry ransomware attack that hit the NHS last May offered to free machines for a fee paid in the currency.

Abbott (pictured above) revealed that Labour was looking into the movement of funds using Bitcoin and their possible links to criminality in an interview with The House magazine.


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She said: “One of the problems with Bitcoin is the extent to which it is just a gigantic Ponzi scheme... If everyone took their Bitcoin money and tried to buy a new car all at once the whole thing would collapse.”

She added: “But we are certainly worried about how in the here and now it is being used to fund terrorist activity and that is something we are looking at.”

Abbott said Labour would impose regulations on digital currencies the way Jeremy Corbyn vowed to curb the power of financial services last month.

“Labour overall thinks it’s important to have proper regulation of financial services,” she said. “It was poor regulation of financial services which led to the 2008 crash and obviously regulating Bitcoin would be part of that.”

The Government has announced its own plans to crack down on Bitcoin by forcing trading exchanges to disclose the identities of their users and report suspicious activity.

A Treasury spokesman said last year: "We intend to update regulation to bring virtual currency exchange platforms into anti-money-laundering and counter-terrorist-financing regulation.”

 

About the author

Emilio Casalicchio is chief reporter for PublicTechnology sister publication PoliticsHome, where this story first appeared

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