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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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Revealed: Huge shortfall in NHS funding for weight-loss jab

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Revealed: Huge shortfall in NHS funding for weight-loss jab

So little money has been set aside by the NHS for the rollout of the Mounjaro weight-loss jab in GP surgeries that as few as one in five people with life-threatening obesity is likely to get treatment, new research shows.

The NHS estimates that around 220,000 people living with obesity will be eligible for treatment through their GP over the next three years.

But Freedom of Information requests by the British Medical Journal revealed that funding from NHS England has fallen well short of what is needed for the rollout.

Just nine out of 40 Integrated Care Boards (ICBs) in England said they had enough funding to treat the 70% of eligible patients who are expected to come forward.

Four ICBs – which plan health services in local areas – said NHS funding covered just 25% or fewer of their eligible patients.

Coventry and Warwickshire ICB said funding would only stretch to treat 21% of its patients.

The findings confirm an investigation by Sky News earlier this summer that access to Mounjaro is a postcode lottery for people living with obesity.

Ellen Welch, Doctors’ Association UK (DAUK) co-chair, told the BMJ: “These figures confirm the fear that the rollout is not fit for purpose.

“There is a huge discrepancy between national messaging and what patients are actually being delivered on a local level.”

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Bank lobby chief warns Reeves over budget tax raid

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How much will Mounjaro price rise by?

Five ICBs admitted they are already considering further tightening the prescribing criteria or rationing the treatment beyond the plan agreed by the NHS.

Any change would effectively move the goalposts for people who thought they qualified for NHS treatment.

Birmingham and Solihull ICB received funding to cover just 52% of its eligible patients. It admitted: “Difficult decisions are having to be made to ensure money is spent in the most effective and efficient way possible and for the greatest patient benefit.”

Dr Jonathan Hazlehurst, an obesity specialist and researcher at the University of Birmingham, said NHS England has only provided funding for just over 22,000 patients in the first year of the rollout.

“It shows that there’s a lack of political will to fund this adequately,” he told Sky News.

“NHS England says that obesity costs the NHS £11.4bn per annum as a pure NHS cost.

“Yet we can’t even afford to properly fund the rollout of a life-changing drug in year one. That just doesn’t make any sense.”

An NHS spokesperson said: “The NHS is fully supporting the phased rollout of tirzepatide for eligible patients, having issued guidance in line with the NICE guidance, and provided funding to local ICBs to support patient care in March 2025.

“These represent brand-new services in primary care that are being established and scaled up over time, starting with those who are in the most need – and in the meantime, eligible patients can get weight loss support from a range of other services, including the NHS Digital Weight Management programme.”

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D-Day for Rayner? PM’s adviser prepares pivotal verdict – as her lawyers deny giving tax advice

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D-Day for Rayner? PM's adviser prepares pivotal verdict - as her lawyers deny giving tax advice

Sir Keir Starmer could be forced into a decision over Angela Rayner’s future as early as today, as the prime minister’s ethics adviser prepares his verdict on the Labour deputy’s tax affairs.

Ms Rayner, who is also the housing secretary, has been under mounting pressure since she admitted not paying the correct amount of stamp duty on an £800,000 flat in Hove, East Sussex.

She has argued the mistake was made as a result of incorrect advice from a conveyancer and two trust law experts, who told her she did not need to pay the higher rate reserved for second home purchases.

Her case was thrust into doubt late on Thursday when the conveyancing firm – Verrico & Associates – said it did not provide advice and had been made “scapegoats” in the political row.

Its managing director, Joanna Verrico, told The Daily Telegraph while it had acted for Ms Rayner when she bought the property, no tax or trust advice was provided.

Any advice she may have received will form a key plank of an investigation by Sir Keir’s independent ethics guru, Sir Laurie Magnus, who Ms Rayner referred herself to earlier this week.

Downing Street has said the prime minister expects a “quick” verdict, and he has refused to rule out sacking his second-in-command.

“I will act on whatever the report is that’s put in front of me,” Sir Keir told the BBC on Thursday – and that report may well arrive on his desk today.

Sir Laurie has concluded investigations into ex-ministers Nadhim Zahawi and Tulip Siddiq within days – and Sky’s chief political correspondent Jon Craig reports he’s due to go on holiday on Saturday.

He is assessing whether Ms Rayner broke ministerial rules, which place an “overarching duty on ministers to comply with the law”, “behave in a way that upholds the highest standards of propriety”, and “be as open as possible” with the public.

Sir Keir Starmer and Angela Rayner have been at the top of Labour since 2020. Pic: PA
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Sir Keir Starmer and Angela Rayner have been at the top of Labour since 2020. Pic: PA

Conservative leader Kemi Badenoch has said Ms Rayner must go.

In a statement following the intervention by Verrico & Associates, she said: “This is yet more damning evidence that Angela Rayner has not been honest with the British public.

“She must resign or Keir Starmer must finally find the backbone to sack her.”

Read more:
Key questions left unanswered in Angela Rayner tax row
Victim of misogyny’ or ‘freeloading’ deputy prime minister?

Sir Laurie Magnus has a record of quick verdicts. Pic: Gov.uk
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Sir Laurie Magnus has a record of quick verdicts. Pic: Gov.uk

The row began when The Daily Telegraph first claimed Ms Rayner avoided £40,000 in stamp duty on the flat in Hove by removing her name from the deeds of another property in Greater Manchester.

Ms Rayner said she sold her stake in her family home in Ashton-under-Lyne to a trust that was set up to provide for her teenage son, who has lifelong disabilities – meaning she did not technically own that home when she purchased the flat, and so was not subject to the higher rate of stamp duty that applies to second homes.

She has described it as an “honest mistake”, and tearfully revealed on Sky News’ Electoral Dysfunction podcast she had already considered resigning.

She said she realised what had happened after seeking fresh legal advice, having spent weeks dismissing questions about the tax claims.

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What does Rayner’s tax issue mean for the Starmer project?

Were Ms Rayner to depart, it would make for a difficult end to a week which began with Sir Keir confidently declaring “phase two” of his government was now under way.

She is overseeing some of his key targets – notably building 1.5 million new homes this parliament, and a large expansion of workers’ rights.

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Man whose arrest sparked Epping hotel protest found guilty of sexual assault of 14-year-old girl

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Man whose arrest sparked Epping hotel protest found guilty of sexual assault of 14-year-old girl

A man whose arrest sparked a series of protests outside an Essex hotel housing asylum seekers, has been found guilty of sexual assault.

The Bell Hotel in Epping became the focal point of demonstrations after Hadush Gerberslasie Kebatu was arrested, and later charged, on 13 July with the sexual assault of a 14-year-old girl.

Ethiopian national Kebatu, 41, was alleged to have attempted to kiss the teenager, put his hand on her thigh and brushed her hair in July after she offered him pizza.

An adult member of the public also accused Kebatu of trying to kiss her, putting his hand on her leg and telling her she was pretty, days after he arrived in the UK on a small boat.

Police and protesters outside the Bell Hotel. Pic: PA
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Police and protesters outside the Bell Hotel. Pic: PA

Kebatu, who was a “teacher of sports” in his home country, had denied two counts of sexual assault, one count of attempted sexual assault, one count of inciting a girl to engage in sexual activity, and one count of harassment without violence near the Bell Hotel.

But at Chelmsford Magistrates’ Court on Thursday, he was found guilty of all charges. District judge Christopher Williams took just 30 minutes to return the verdicts and his reasoning.

The three-day trial heard Kebatu had also told two teenagers he wanted to “have a baby with each of them” – but Kebatu had previously told the trial he was “not a wild animal”.

Mr Williams said he was not persuaded there was “any evidence to suggest the children fabricated any of the evidence they gave”.

The defendant, wearing a grey tracksuit and sitting with a translator, gave no visible reaction as Mr Williams told him he was guilty.

Kebatu is due to be sentenced at the same court on 23 September.

The judge told the defendant that he should expect an “immediate custodial sentence”.

Essex Police Assistant Chief Constable Stuart Hooper paid tribute to the victims for ensuring the evidence put before the court was strong and true.

“It is because of their accounts of what happened, and the close co-operation with our Crown Prosecution Service colleagues, that we have been able to secure this conviction.

“We’re acutely aware that this incident has attracted widespread public interest.

“We have always said that we treat and investigate every report made to us without fear or favour.”

‘It must never happen again’

Conservative shadow Home Office minister Katie Lam said the guilty verdict showed the risks of allowing asylum seekers “to roam around communities freely”.

“The crimes of this illegal migrant are shocking and heart-breaking and the victims have shown incredible bravery.

“This must never be allowed to happen again. Every illegal migrant should be detained immediately and swiftly deported.”

The incidents sparked protests and counter-protests outside the former Bell Hotel – as well as at hotels housing asylum seekers across the country.

Rebecca Mundy, deputy chief crown prosecutor with CPS East of England, said: “This was an incident which became a cause of deep concern for the local community.

“Our prosecutors worked carefully and impartially to bring this case to justice according to the law.”

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