Small Scale Crypto Crimes Hindering Adoption.
With crypto crime as a major hindrance to adoption, the UK Police has contacted financial fraud lawyers to help get justice for victims of small-scale crypto fraud.
Police experts in the UK have contacted financial fraud lawyers to help get justice for victims of small-scale crypto fraud. Since civil court processes are usually very expensive, such offenders often walk free and the crime goes unprosecuted living victims with a bitter taste towards crypto in general.
While blockchain analytics have grown around tracing cryptocurrency movements and can be used to trace dirty crypto, the problem in obtaining convictions stems from a “resourcing issue.”
According to Vanessa Whitman, a finance disputes lawyer who specialises in crypto at the international law firm CMS, “The Criminal Prosecution Service [CPS] in the UK has limited resources and will only prosecute cases which it thinks have a very strong chance of success.”
Many of the crypto complaints filed in the UK have striking similarities with those reported in Africa as seen with two of the biggest scams in South Africa in the Mirror Trading International scheme and the Africrypt scam that cost investors billions of South African Rands.
The bigger scams tend to capture the headlines and attract more action from law enforcement at the cost of the smaller scams of amounts around $1,000 ( close to UGX. 4 million) making it easier to get away with these crimes leaving victims without compensation or justice.
Whitman noted that victims who turn to civil lawyers to get some sort of justice are often frustrated by the cost of this civil action.
“Instructing civil lawyers to go and get court orders to serve on exchanges is very expensive,” says Whitman, “and if you are a victim who has lost a couple of thousand pounds or dollars’ worth of crypto, that’s soon going to be eclipsed by the cost of any legal action.”
Charles Kerrigan, a crypto and digital assets lawyer at CMS pointed out that while losing a few thousand rands is not like losing R5 million or R5 billion, it does have an impact on crypto adoption. “So you just can’t have things like that happening,” Kerrigan said.
“We need to have tools that are available at a large scale and a small scale. There’s every incentive to chase down the big ones. We also need to ensure that we’ve got the incentives and the tools to chase down the small ones.”
Whitman and Kerrigan are collaborating with others in the crypto industry on a proposal to revolutionize the way crypto crime is prosecuted in the UK. If accepted, this proposal could also be exported to Africa where it would be very critical to protecting the millions looking to get into crypto on a small scale.
The proposal aims to provide victims of crypto crime with quick access to justice through “self-management,” eliminating the need for expensive lawyers.
Although the proposal is still in its early stages and details are still unclear, Whitman is optimistic that it will provide a much-needed solution for victims of crypto crime.