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Bitcoin, “not an investment”? The semantic battle of the British financial policeman

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AT half word, half measureBritish lawmakers want to restrict the language used to promote cryptocurrencies. Are these limitations really an effective weapon in the fight against crypto scam ads?

Prohibited expressions, really?

According to a item December 9, 2021 of The Times, Members of the Treasury Select Committee asked the head of the Financial Conduct Authority (FCA), Nikhil Rathi, fromto forbid the use of some terms to crypto companies. This linguistic restriction, which concerns in particular the words “Invest” Where “Investment”, would aim to fight against fraudulent promotions. Expression “Your investment” would create a false impression of similarity between a crypto and an FTSE 100 company or mutual fund.

Conservative MP for West Worcestershire, Harriett baldwin, even hitched up Rathi’s suspenders. The applicant accuses the FCA of being unable put an end to fraudulent promotions. She goes so far as to claim that the institution helps criminals who use the list of unregistered crypto companies published on the financial policeman’s site:

“In fact, your website publishes a list of unregistered crypto-asset companies for anti-money laundering purposes. It’s supposed to be useful, but it could also be useful for someone who just wants to launder money. “

While MP Baldwin’s remonstrances are understandable and legitimate, the new lexical provisions requested by MPs have what make smile, even scammers. Beyond major political posturing, will removing a few words from their dictionary prevent scammers from advertising fraudulent crypto projects?

This possible ban on these terms also raises another question: isn’t the purchase of serious cryptocurrencies not an investment, what do parliamentarians think? MPs apparently want to avoid an amalgamation between cryptocurrency and an FTSE 100 company or mutual fund. But how then to qualify the long-term purchase and holding of bitcoins or other cryptocurrencies by private or institutional investors, or by companies?

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Rathi responded to MPs with a half-confession of failure. On the one hand, his organization would look into the issue of regulating cryptocurrency advertising and expect more supervisory power. On the other hand, he admits that without putting these powers into practice, the FCA could not do much.

The President of the FCA, Charles Randell, had also already admitted theincapacity of the FCA with regard to crypto advertising. He had expressed his concern about the advertisements for Floki Inu on London buses. In reality, the financial policeman can only warn investors.

How then does the FCA intend to protect investors more effectively against fraudulent crypto projects? The regulator is simply considering removing any safety net or financial cover from victims of crypto scams, by rejecting any claim for compensation under the Financial Services Compensation System:

“Personally, I would suggest that we just say that anything cryptocurrency related should not be eligible for compensation, so consumers are clear about this when they invest. “

The FCA doesn’t seem to want to ban cryptocurrencies, but the financial market policeman apparently wants to build walls to limit cryptocurrency adoption. She has already succeeded in implementing this model with Binance.

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