JustUs founder and chief executive Lee Birkett has called for the government’s Online Safety Bill to be expanded to include financial services and give the City regulator more power to act against unregulated crypto lenders.
A joint committee of both houses was established in May to consider the draft legislation, which aims to protect people against online abuse. This committee must report by 10 December 2021.
Birkett, who runs peer-to-peer lending platform JustUs and sister Moneybrain which is regulated to offer its cryptocurrency BiPs, said that the Bill should give the Financial Conduct Authority (FCA) powers to take action against unregulated crypto lenders that are illegally offering financial promotions.
“The problem is the Treasury is not supporting what’s needed, the Treasury needs to expand the Bill to incorporate financial services, but they’re not,” said Birkett.
“Why is the government not supporting the FCA on banning the illegal promotion of crypto? It puts us who are regulated and doing it properly at an unfair advantage.
“The FCA is in alignment with us, they want the Online Harms Bill to promote financial promotions, I think that’s what should be happening, people are being victims of scamming and illegal promotion.
“The government needs to be more proactive and expand it, that’s what the FCA has been asking for. The FCA doesn’t have the legal power to stop the likes of Luno and others, the government hasn’t given them that power.
“They can’t enforce anything until the Bill goes through. At the moment it doesn’t cover financial services.”
The Bill will legislate for online companies to take responsibility for tackling fraudulent user-generated content, such as posts on social media, on their platforms. This includes fake investment opportunities posted by users on Facebook groups or sent via Snapchat.