● Committee: United Nations Office on Drugs and Crime (UNODC)

● Topic: Tackling cryptocurrency fraud

● Country: United Kingdom

With the advent of digital-based technology, an array of services related to the so-
called ground-based economy has exponentially emerged, demanding for
comprehensive reforms to the landscape of financial transactions. Hence, it is
irrefutable to claim that these advancements have revolutionized the way the world
perceives and conducts transactions, that they offer unprecedented levels of
convenience and accessibility is need not be put into question. Notwithstanding,
alongside with desirous merits, its demerits are also worth to be taken into account.

The threat of cryptocurrency fraud in all its forms and manifestations has always been
and continues to remain at the center of international cooperative efforts, regardless of
which country it occurs in. The United Kingdom is not an exception when it comes to
facing significant obstacles that threaten to impede progress in the crypto space,
during its ever-present ambition to be a global crypto asset hub. The dual challenge
involves hurdles related to retail customer access to crypto products and the
complexities surrounding companies attempting to open and maintain banking
accounts within the country. In response to the above-mentioned challengers, In
response to these challenges, Member of Parliament Natalie Elphicke has called for
the authorities to harness the power of blockchain technology. “Now, I want to see the
U.K. doing more to harness the power of blockchain technologies, to be that leader, to
mark that step change because it's vital that industry and policymakers work together
to advance understanding and the application of the technologies,”.

The United Kingdom, as a steadfast proponent of worldwide cooperation in combating

transnational crime, has recognized the urgent need for concerted efforts within the
United Nations Office on Drugs and Crime (UNODC) to address the escalating
menace posed by cryptocurrency fraud. The proliferation related to this kind of
transaction has engendered a paradigm shift in the world economy, fostering an ideal
milieu for exploitation by criminal entities. To exemplify, the intrinsic anonymity and
decentralization offered by cyberspace have facilitated a surge in fraudulent activities,
ranging from illicit fundraising to money laundering as well as terrorist financing,
taking a toll on the overall ambience of cooperativeness and friendliness within the
digital-based economic zone. Taking this hindrance into consideration, the monitoring
of cryptocurrency-related activities by authorities, including the Financial Conduct
Authority (FCA), has been intensified to ensure compliance with anti-money
laundering (AML) and know-your-customer (KYC) regulations. For cryptocurrency
exchanges and trading platforms to operate legally in the UK, registration with the
FCA and adherence to stringent regulatory standards are mandatory. Additionally, the
UK government has showcased operations in exploring central bank digital currencies
(CBDCs) and distributed ledger technology (DLT) to modernize the financial system
and enhance payment efficiency. While acknowledging the associated risks such as
market volatility and potential illegal usage, the UK also believes in the
transformative potential of blockchain technology and digital assets for fostering
innovation and economic advancement.

On a domestic scale, the UK is aiming to regain its place at the vanguard of

jurisdictions with a comprehensive and proportionate regulatory framework for crypto
assets, aiming to foster innovation, competition and consumer protection. Said
approach is based on the principle of "same risk, same regulatory outcome", meaning
that crypto asset activities should meet the same regulatory standards as similar
traditional financial services activities. Regulatory regime for crypto assets is
currently undergoing significant changes, as the government and the regulators are
implementing new legislation, guidance and rules to address the emerging risks and
opportunities posed by crypto assets. Government and regulators have recognised the
call for updating the adaptation of the existing regulatory framework for crypto assets,
to reflect the changing nature and scale of the sector and to align with the international
standards and best practices. Furthermore, the UK has adopted a phased and
proportionate method to regulate crypto assets, focusing on the areas of highest risk
and priority while leaving room for future developments and innovations. In tandem
with preventive measures, said country underscores the significance of robust
enforcement actions to deter and prosecute perpetrators of cryptocurrency fraud,
fostering a conductive milieu for further developments and the welfare of society.

In conclusion, the United Kingdom reaffirms its commitment to collaborative action

within the United Nations Office on Drugs and Crime (UNODC) framework to
address the scourge of cryptocurrency fraud. By fostering international cooperation,
enhancing regulatory frameworks, leveraging technological innovation, and
promoting public awareness, collectively safeguarding the integrity of the global
financial system and mitigating the proliferation of illicit activities facilitated by
cryptocurrency is able to be performed.
Citations:

1. Ferreira, P. (n.d.). The UK crypto industry’s struggle for financial inclusion.

Financial and Business News | Finance Magnates. Retrieved April 6, 2024,
from https://www.financemagnates.com/cryptocurrency/the-uk-crypto-
industrys-struggle-for-financial-inclusion/
2. Arrow, S. T. R. (n.d.). Crypto assets in the UK: Navigating opportunities

and challenges in a dynamic landscape. Shoosmiths.com. Retrieved April 6,

2024, from

https://www.shoosmiths.com/insights/articles/crypto-assets-in-the-uk-

navigating-opportunities-and-challenges-in-a-dynamic-landscape/

3. Key crypto case tracker. (n.d.). Shoosmiths.com. Retrieved April 6, 2024, from

https://www.shoosmiths.com/expertise/services/litigation-services/blockchain-

and-digital-assets-disputes-and-recoveries/key-crypto-case-tracker/

4. (Shumba, 2023)
Shumba, C. (2023, December 15). Lawmaker calls for the UK government
to do more for blockchain. CoinDesk, from
https://www.coindesk.com/policy/2023/12/15/lawmaker-calls-for-the-uk-
government-to-do-more-for-blockchain/