The Times - UK (2022-03-15)

40 Tuesday March 15 2022 | the times

Business

The number of reports to the City
regulator of alleged cryptocurrency
scams more than doubled last year.
The Financial Conduct Authority
received 6,372 alerts about suspected
crypto frauds last year, up from 3,143
the year before, according to a response
to a Freedom of Information request.
The rise of bitcoin and other crypto-
currencies, as well as the exchanges on
which they can be traded, has attracted
interest from ordinary investors hoping
to make significant returns. Crypto-re-
lated fraud has grown alongside this
growing interest. The most notorious
example was the £4 billion OneCoin
scam, a million-person pyramid scheme
masquerading as a cryptocurrency in-
vestment. Other issues include the
abuse of electronic wallets and crypto
exchanges to steal people’s money.
The FCA said that last year an esti-
mated 2.3 million adults held crypto-
currencies — alternative digital cur-
rencies — up from 1.9 million in 2020.
The OneCoin case is an illustration
of difficulties the FCA has had dealing
with scams in this area. The watchdog
flagged concerns about OneCoin in
2016, but months later the warning was

removed from its website after pressure

from the solicitors of Ruja Ignatova, the

now-fugitive OneCoin founder.

Sales of OneCoin in Britain rose after

the warning was removed, according to

victim support groups.

Last month, The Times revealed that

the FCA had authorised a payments

business in 2018 while its founder was

subject to a money laundering investi-

gation related to OneCoin.

The authority wants the government

to include financial advertising in the

upcoming Online Safety Bill to help to

prevent scams by forcing social media

sites and search engines to take more

responsibility for scammers who use

their platforms to advertise. The regu-

lator’s concerns about crypto-based

investments include price volatility,

product complexity, high charges and

fees and misleading marketing.

Since January last year, all British

crypto asset firms must be registered

with the FCA under regulations to

tackle money laundering. Operating

without a registration is a criminal

offence. However, many investments

advertising high returns based on

crypto assets are not subject to any

regulation beyond anti-money laun-

dering requirements.

Tim Mangnall, 35, chief executive of

Capital Block, which advises sports and

entertainment bodies on crypto-related

schemes, said: “The space does need full

regulation and it needs it fast, otherwise

the honest advisers, business and plat-

forms will continue to be faced with

some of the scepticism the market faces.”

Mangnall said that “bad apples” were

taking advantage of individual and

corporate investors. “I’ve personally

been investing in crypto for years and I

still always take a step back and ask

myself whether I fully know what I’m

getting into, who are the team behind

the project and what is their experience

in the sector. It always comes back to

due diligence.”

An FCA spokeswoman said: “It’s

important that consumers check who

they are really dealing with before

making an investment decision. Check

if they are authorised by the FCA and

do your research to understand the

risks that might be posed.”

Ruja Ignatova is the

founder of a Ponzi

scheme known as

OneCoin, promoted

as a cryptocurrency.

The Bulgarian was

convicted of fraud,

but flew to Greece

and disappeared

Rishi Sunak has been urged to

introduce a tax “super-deduction” for

companies that invest in retraining

staff, linked to areas where there are

skills shortages.

The Institute of Directors said that

there had been a “clear market failure”

in training staff to meet labour short-

ages after Brexit and the pandemic. It

called for a tax incentive to encourage

more workplace investment.

In a lecture at Bayes Business School

last month, the chancellor proposed

examining if the tax system was doing

Middle-income self-employed house-

holds risk being left behind amid a

broader growth in earnings, worsening

income inequality in Britain, a leading

think tank has warned.

According to research from the

Institute for Fiscal Studies and the

Nuffield Foundation, the social well-

being charity, the government is

running out of tools to boost the pay of

middle-income earners and low-paid

workers in self-employment.

“While it is easier said than done, we

must find additional ways of restoring

widespread earnings growth,” Robert

Tax change could boost retraining, say directors

enough to encourage businesses to

invest in the right kind of training.

Britain has fallen behind its inter-

national peers in adult technical skills,

with only 18 per cent of those aged 25 to

64 holding vocational qualifications.

The institute said that members that

were not intending to increase invest-

ment in skills training in the next year

had responded positively when asked if

a tax deduction would change their

plans.

Kitty Ussher, chief economist of the

IoD, said: “Reskilling an existing team

member, as opposed to updating

existing expertise, is not tax deductible.

There is also the risk that the individual,

once retrained in a skills shortage area,

is more likely to be poached by compet-

itors. This represents a clear market

failure.”

The institute also called for

apprenticeship levy funds to be used to

subsidise companies to release indivi-

duals for external training in areas on

the national skills shortage list.

Jonathan Geldart, its director-general,

said: “A sole reliance on appren-

ticeships as a policy tool also does

nothing to incentivise firms to improve

director-level and other forms of

management training.”

Louisa Clarence-Smith

Kitty Ussher wants

to improve training

Self-employed ‘will miss out on wage growth’

Joyce, deputy director at the institute,

said.

Britons are facing the worst squeeze

on their real incomes in half a century,

driven by surging inflation. Higher

energy and food bills place the highest

burden on poorer households, which

on average spend almost double on

necessities compared with the highest-

earning households.

While poorer workers benefit from

government policies to raise the mini-

mum wage and expand tax credits,

these measures do not help those in

higher wage brackets. “They cannot

help average earners who continue to

see worrying wage stagnation and min-

imum wages cannot help the growing

group in self-employment,” Joyce said.

The minimum wage will be raised to

£9.50 in April from £8.91 for those aged

over 23. It covers two million workers,

or 7 per cent of the total workforce.

The institute says that the minimum

wage has helped to boost earnings for

low-paid workers, but has had little im-

pact on the wider income distribution.

“The policy cupboard beyond tax cred-

its and minimum wages is bare,” said

the report, whose chairman was

Sir Angus Deaton, the Nobel prize-

winning economist who has pioneered

research on how household spending

can be used to measure poverty.

Mehreen Khan Economics Editor ‘Minimum

wage and

tax credits

cannot help

average

earners who

continue to

see wage

stagnation’

Cryptocurrency scams double in a year

James Hurley, Ben Martin