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Cryptocurrency trading is “too dangerous” to remain outside mainstream financial regulation and could pose “a systemic problem” without action, the deputy governor of the Bank of England has warned.

Speaking for the first time since the founder of the crypto trading platform FTX was arrested and charged with massive fraud, Sir Jon Cunliffe told Sky News the Bank is considering regulation to protect retail investors in the “casino” of crypto trading, as well as the wider financial system from potential crypto shocks.

Sam Bankman-Fried was extradited on Wednesday from the Bahamas to the US where he will appear in a New York court charged with eight counts of fraud, money laundering and breaking campaign finance.

The collapse of FTX left more than one million customers unable to withdraw assets worth an estimated $8bn.

Prosecutors allege he used FTX’s customers’ money to cover losses in his private crypto hedge fund Alameda Capital in what the company’s new chief executive told Congress was “old-fashioned embezzlement”.

An estimated 80,000 of FTX’s customers are based in the UK, with individual liabilities as high as £5m in life savings according to a lawyer acting for dozens of victims.

Louise Abbott, a crypto-fraud specialist, told Sky News: “These individual investors have invested anything from a couple of thousand pounds up to about £5m, so massive amounts of money, all completely frozen, I’m going to use the word frozen rather than lost, because hopefully there is going to be something given back to them at some point. But this is huge money, huge money lost or stuck, or frozen in time.”

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Crypto credibility

The episode is a huge blow to the credibility of cryptocurrencies, digital assets that draw their value not from state backing, but from relative scarcity and the willingness of other investors to trade in them.

Mr Bankman-Fried had cultivated links in Washington and on Wall Street, making millions of dollars in political donations and attracting high-profile investors to his platform.

His fall has emphasised the volatility of crypto investment and the lack of regulation in an industry that, despite widespread scepticism, is attracting growing attention from the financial mainstream.

Efforts to regulate

In the UK, regulators have tried and failed to impose their writ on crypto exchanges domiciled offshore, while the government has a goal, set out in April by Rishi Sunak when he was chancellor, to make the UK a “global crypto assets hub”, an ambition that depends in large part on effective regulation.

Sir Jon, deputy governor with responsibility for financial stability, told Sky News the Bank’s regulation efforts were aimed at protecting individuals and maintaining financial stability.

Deputy Governor of the Bank of England Jon Cunliffe speaks during the Bank of England's financial stability report at the Bank of England in central London on June 27, 2017. / AFP PHOTO / POOL / Jonathan Brady        (Photo credit should read JONATHAN BRADY/AFP via Getty Images)
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Deputy Governor of the Bank of England Jon Cunliffe

“There’s a lot of activity that’s developed over the last 10 years on the trading and sale of crypto assets, assets without any intrinsic value, so they’re incredibly volatile. And all of that has grown up outside of regulation,” he said.

“What we saw in FTX… is a number of activities which in the regulated financial sector, would have had certain protections. We saw things like clients’ money appears to have gone missing, conflicts of interest between different operations, transparency, audit and accounting. All of the perhaps boring things that happened in the normal financial sector, didn’t really happen in that set of activities. And as a result, I think a lot of people have lost a lot of money.”

Comparing crypto trading to a casino, Sir Jon said investors who wanted to speculate should be able to do so without the risk of losing access to their funds.

“It is in effect, in my view, a gamble, but we allow people to bet, so if you then want to get involved in that you should have the ability to in a place that is regulated in the same way that if you gamble in a casino it’s regulated. You should have the full information on the tin as to what you’re doing.”

The Bank also has to address the risk to financial stability that could flow from digital assets as institutional investors and banks explore exposure to an estimated $1trn in crypto assets.

“This trading of crypto assets was not big enough to destabilise the financial system, but it was starting to develop links with the financial system,” Sir Jon said. “I don’t know how that will develop. But we had banks and investment funds and others who wanted to invest in it. I think we should think about regulation before it becomes integrated with the financial system and before we could have a potential systemic problem.

“So I don’t think it will be possible to say this can be just kept outside of the financial system. It’s too dangerous. I think it is difficult but possible to say, let’s bring it in, where and when we think we can manage the risk to the standards we’re used to.”

Potential for blockchain

While cryptocurrencies have proved consistently volatile since the inception of Bitcoin 14 years ago, the underlying technology, blockchain, is considered to have significant potential across industries to manage data, and speed up and simplify transactions.

Blockchain provides proof of transactions on a public record known as a distributed digital ledger.

Each new exchange of cryptocurrency is recorded on a “block” which is added to the “chain” containing details of the new transaction and the previous transaction, meaning it can only be falsified by altering all previous links.

The system is maintained and overseen by every computer linked to the network rather than a central monitoring entity.

Mercedes is exploring the potential of blockchain to manage the data that will enable autonomous driving, while Vodafone is exploring its utility in managing the billions of micro-transactions that will be facilitated by the next generation of internet technology.

‘Smart money’ could also simplify global supply chains, with the prospect of micro transactions using stable tokens being linked to individual parts in production processes.

“There are technologies here which could, and I stress could, be of real use in the normal financial system, more efficient ways of doing things, potentially more resilient ways of doing things,” said Sir Jon.

“That hasn’t been proven in the crypto world. But if we could provide a regulatory space where people can see if they can develop products using this, we might be able to get the benefit of some of those technologies.”

The Bank of England’s own digital coin

As part of this process the Bank of England is consulting on plans to develop its own central bank digital coin, an electronic version of sterling that would carry the same security as a pound coin, but with the digital flexibility that could one day replace cash.

“Physical cash will always be made available by the bank as long as people want it and many people depend on it. But it’s not fully usable in the way we live now. So the question for the Bank of England is that as the way we as society changes, as we live our lives more digitally, should we continue to provide money to the public which is usable across a range of transactions?

“This would be a digital equivalent of the’ I promise to pay the bearer’ promise, which in the end underpins confidence in money in the UK. Whenever you want, you can turn that money you hold in the bank into basically Bank of England money backed by the state with that promise to pay the bearer.

“We want to ensure that as physical cash becomes less usable in many parts of the economy, perhaps we need to offer something digitally to provide that underpinning.”

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UK weather: Scottish hamlet reaches -18C in coldest January night in 15 years

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UK weather: Scottish hamlet reaches -18C in coldest January night in 15 years

Temperatures in a hamlet in northern Scotland fell to -18.7C (-1.66F) overnight – the UK’s coldest January night in 15 years, the Met Office has said.

Altnaharra, in the northern region of the Highlands, reached the lowest temperature while nearby Kinbrace reached -17.9C (-0.22F).

It is the coldest January overnight temperature since 2010, when temperatures dropped below -15C several times at locations across the UK, including -22.3C (-8.14F) on 8 January in Altnaharra.

Forecasters had previously said there was a very small probability it could reach -19C.

A Highland cow grazes in a snow-covered field near Shotts, North Lanarkshire. Temperatures will continue to fall over the coming days, with the mercury potentially reaching minus 20C in northern parts of the UK on Friday night. Weather warnings for ice are in place across the majority of Wales and Northern Ireland, as well as large parts of the east of England. Picture date: Friday January 10, 2025.
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A Highland cow grazing near Shotts, North Lanarkshire. Pic: PA

Met Office meteorologist Alex Deakin said: “Friday night into Saturday morning may well be the nadir of this current cold spell.”

Temperatures for large parts of the UK are set to fall again as the cold weather continues.

St Andrew's church, Kiln Pit in Durham Pic: PA
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St Andrew’s church at Kiln Pit in Durham. Pic: PA

Met Office meteorologist Zoe Hutin said: “We’ve still got tonight to come, and tomorrow (Saturday) night could also be chilly as well.

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“Temperatures for tomorrow night, it will be mainly eastern parts that see temperatures dropping widely below freezing, so East Anglia, the northeast of England, northern and eastern Scotland as well.

“So another chilly night to come on Saturday, but then as we go into Sunday and into Monday, then we can start to expect temperatures to recover somewhat.

“I won’t rule out the risk of seeing something around or just below freezing again on Sunday night into Monday, but it won’t be quite so dramatic as the temperatures that we’re going to experience as we go overnight tonight.”

Ugo Sassi from Cambridge skates on a frozen flooded field in Upware, Cambridgeshire. The Cambridgeshire Fens were the birthplace of British speed skating and require four nights of frost, with a temperature of -4 or colder and little or no thawing during the days in between, to make ice strong enough to skate on. Temperatures will continue to fall over the coming days, with the mercury potentially reaching minus 20C in northern parts of the UK on Friday night. Weather warnings for ice are in pla
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Skating on a frozen flooded field in Upware, Cambridgeshire. Pic: PA

On Monday, temperatures are expected to be more in line with the seasonal norm, at about 7C to 8C.

A family walk across Hothfield Common in frosty conditions near Ashford in Kent.
Pic: PA
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A family walk across Hothfield Common in frosty conditions near Ashford in Kent. Pic: PA

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The freezing conditions have led to travel disruption, with Manchester Airport closing both its runways on Thursday morning because of “significant levels of snow”. They were later reopened.

Transport for Wales closed some railway lines because of damage to tracks.

Hundreds of schools in Scotland and about 90 in Wales were shut on Thursday.

Meanwhile, staff and customers at a pub thought to be Britain’s highest were finally able to leave on Thursday after being snowed in.

The Tan Hill Inn in Richmond, North Yorkshire, is 1,732 feet (528m) above sea level.

Six staff and 23 visitors were stuck, the pub said on Facebook.

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Government contract ends for controversial asylum barge Bibby Stockholm

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Government contract ends for controversial asylum barge Bibby Stockholm

The government contract for the controversial asylum barge in Dorset has ended.

The last asylum seekers are believed to have left Bibby Stockholm at the end of November after Labour said it would have cost more than £20m to run in 2025.

Its closure this month was expected, and on Friday the management firm and the Home Office confirmed to Sky News the contract had now expired.

It’s currently unclear when Bibby Stockholm will leave Portland and what it will be used for next.

The Conservative government started using the vessel in August 2023.

It said putting nearly 500 men on board while they waited for an asylum decision was cheaper than paying for hotel rooms.

However, it was controversial from the start and sparked legal challenges and protests.

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August: 2023: Barge reminds migrant of Islamic State

Days after the first group boarded there was an outbreak of Legionella bacteria in the water system and it had to be evacuated for two months.

In December 2023, an Albanian asylum seeker, Leonard Farruku, died on board.

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A Home Office spokesperson said the government was determined to reform the asylum system to make it operate “swiftly, firmly and fairly”.

“This includes our accommodation sites, as we continue to identify a range of options to reduce the use of hotels,” the new statement added.

“We are already closing some hotels and will continue to engage with local authorities and key stakeholders as part of this process.”

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How is your local NHS coping under winter pressures?

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How is your local NHS coping under winter pressures?

Pressure on hospitals is particularly high this winter, with more than a dozen declaring critical incidents in recent days.

Hospitals struggle every winter with additional pressures due to the impact of cold weather, but the early arrival of flu this season and high volume of cases meant Christmas and New Year’s weeks were even busier than usual.

There are currently at least 20 hospitals that have declared critical incidents in England, although this is a fast-moving picture, and some trusts will go into critical incident for as little as half an hour.

The latest NHS winter situation reports give a more detailed look at the level of pressure experienced by individual trusts, including those with the worst ambulance handover delays and highest levels of flu patients.

Ambulance handover delays

When a patient arrives at a hospital in an ambulance, clinical guidelines suggest that it should take no longer than 15 minutes to transfer them into emergency care.

It is now common for handovers to regularly exceed this timeframe, however, when emergency departments are overcrowded and lack the capacity to keep up with new patient arrivals.

This is risky for patients because it delays their assessment and treatment by clinicians, and also reduces the availability of ambulances to respond to new incidents.

The trust with the longest delays was University Hospitals Plymouth, with an average handover time of three hours and 33 minutes over the week – two hours and 40 minutes longer than the average for England. It also recorded the longest average handover times for a single day, at five hours and 14 minutes on New Year’s Day.

Use the table below to search for local ambulance handover times:

On 7 January, University Hospitals Plymouth declared a critical incident at Derriford Hospital due to “significant and rising demand for hospital care”, though this has since been stood down.

The Shrewsbury and Telford Hospital Trust had an average ambulance handover time of three hours and 15 minutes, increasing by more than an hour from one hour and 51 minutes the week before.

In Royal Cornwall Hospitals NHS Trust, 83% of handovers took more than 30 minutes, the highest share among areas dealing with more than five ambulance arrivals per day.

This area also recently declared and then stood down a critical incident.

In total across England, 43 trusts out of 127 had average handover times of more than an hour, while nine areas had average handover times of more than two hours.

Flu

This winter’s flu wave arrived earlier than usual and has hit health services hard.

Over New Year’s week, there were 5,407 flu patients in hospitals in England on average each day, more than three times higher than during the same week last year and increasing by 20% from the week before.

The worst impacted trusts were Northumbria Healthcare and University Hospitals Birmingham, with 15% and 13% of all available beds occupied by flu patients respectively in the latest week.

Wirral University Teaching Hospital NHS Foundation Trust had among the biggest increase in flu patients from the previous week, more than doubling from 18 to 42 patients per day on average.

Use the table below to search for local flu hospitalisations:

There are some indications that flu activity may have now peaked, with national flu surveillance showing a decrease in positive flu tests in the latest week, though activity remains at high levels.

Bed occupancy

Current NHS guidance is that a maximum of 92% of hospital beds should be occupied to reduce negative risks associated with overfilled beds.

These risks include the impact on patient flow resulting from it being more difficult to find beds for patients, and negative impacts on performance and waiting times, as well as being linked to increased infection rates.

In the week to 5 January, 92.8% of 102,546 open hospital beds were available each day on average, not far off the recommended level.

However, bed occupancy was very high in some trusts, with more than 95% of beds occupied in 43 trusts on average over the week.

The trust with the highest rate of bed occupancy was Wye Valley NHS Trust, with 99.9% of 332 beds occupied on average throughout the week.

There was only one day when beds weren’t fully occupied, on 3 January, when two beds of 322 were available.

Use the table below to search for local bed occupancy:

Kettering General Hospital NHS Trust recorded bed occupancy of 98.5% over the week. This trust declared a critical incident on 8 January.

Part of the problem for bed availability is prolonged hospital stays – also known as bed-blocking.

This is often linked to pressures in other parts of the health and social care system, for example when patients can’t be discharged to appropriate social care providers even though they are ready to leave hospital.

Just under half of beds occupied by patients in English hospitals last week were occupied by long-stay patients who had been there for seven or more days.

In seven trusts, at least three in five beds were occupied by long-stay patients, while in Barking, Havering and Redbridge University Hospitals NHS Trust the figure was more than four in five beds.


The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.

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