British Parliament Fields Demands for Crypto Crackdown Amid Growing Concerns

British Parliament Fields Demands for Crypto Crackdown Amid Growing Concerns

British Members of Parliament (MPs) and campaigners are lobbying the UK government to adopt a stricter stance on the burgeoning crypto industry, per iNews

“It is the Wild West, this grey area between highly leveraged financial investments on the one hand and these products which could quite easily and sensibly be considered gambling,” Conservative MP Richard Holden told iNews

“There needs to be a clear differentiation there in order to protect people,” he added. 

Matt Zarb-Cousin, a former aide to Jeremy Corbyn, a former leader of the Labour Party, took specific aim at soccer clubs’ growing interest in fan tokens. 

Fan tokens are essentially cryptocurrencies that are tied to a soccer club. Some of the biggest soccer clubs in the world have spent over $350 million on fan tokens already, but they have proven to be controversial

“It is one thing for football [soccer] clubs to market gambling to fans, which could lead to people destroying their lives as a consequence, but I think it’s on another level,” said Zarb-Cousin. “It’s even worse to be offering a way into cryptocurrency through the pretense of empowering them in effectively a completely unregulated area.” 

This, of course, is not the first time the crypto industry has ruffled feathers in the United Kingdom. 

The UK’s tense relationship with crypto

Over the last 12 months, the UK has broadly met the crypto industry with skepticism. 

In January 2021, the Financial Conduct Authority (FCA) published five concerns about the crypto industry, including a perceived lack of consumer protection and misleading advertising. 

The regulator has also cracked down on Binance, one of the largest and most well-known crypto exchanges around. In the summer of 2021, the FCA told Decrypt it had a “huge issue” with Binance’s lack of a headquarters. 

In September, the FCA doubled down and said Binance was “not capable” of being regulated after a Binance UK entity failed to provide even basic information to the regulator. 

Binance has since said it is trying to patch things up with the FCA, but there is no evidence to suggest their efforts have worked. 

When it comes to misleading adverts, the FCA is not the only authority that’s worried about crypto. 

The Advertising Standards Authority (ASA) has spent the last 12 months going after Coinbase, Papa Johns, eToro, and several crypto companies for their crypto advertising strategies. 

“We see this as an absolutely crucial and priority area for us. Where we do find problems, we will crack down hard and fast,” Miles Lockwood, director of complaints and investigations at the ASA, said last summer

What about soccer teams?

Binance, Coinbase, and household brands like Papa Johns have faced crypto-related scrutiny in the UK, but recently Arsenal FC has also come under fire following the launch of its AFC fan token. 

In December 2021, the advertising watchdog banned Arsenal FC’s tokens ads, saying that the ads “trivialized investment in crypto assets and took advantage of consumers’ inexperience and credulity.” 

However, whether other well-known teams with fan tokens like Barcelona and Paris Saint Germain will face similar pushback remains to be seen.