UK Preparing To Ban Consumers From Buying Crypto With Borrowed Funds (theguardian.com) 26
The UK financial regulator is preparing to ban retail investors from using borrowed funds such as credit card balances to invest in cryptocurrency as it seeks to overhaul supervision of the fast-growing digital assets market. The Guardian: The soaring values of virtual currencies such as bitcoin after Donald Trump's election have put pressure on the Financial Conduct Authority (FCA) to take a tougher line while it also lays the groundwork for the industry to flourish in the UK.
According to a recent YouGov survey, the proportion of people in the UK using borrowed funds to make crypto purchases more than doubled from 6% in 2022 to 14% last year. Borrowing to fund investments, when asset values could change dramatically, meant consumers risked losing their entire investment and potentially other assets, such as their home. These characteristics closely resembled gambling, the Treasury committee found.
According to a recent YouGov survey, the proportion of people in the UK using borrowed funds to make crypto purchases more than doubled from 6% in 2022 to 14% last year. Borrowing to fund investments, when asset values could change dramatically, meant consumers risked losing their entire investment and potentially other assets, such as their home. These characteristics closely resembled gambling, the Treasury committee found.
Re:Cryptocurrency is NOT an investment (Score:5, Insightful)
You know, I'd agree with you, except that in 2008, banker stupidity caused my house to lose half its value. It wasn't my mistake that caused the loss, but because bankers are politically well connected, not only did I lose my investment, but my tax dollars were used to make the bankers - not me - whole.
When grandma gets scammed, her children lose their inheritance. The fact that a fool and his money are soon parted doesn't mean there's nothing immoral about taking advantage of another person's trust. Without trust, our society would look much different - and I think we'd rather have a society built on trust which prosecutes thieves than a society in which no one trusted each other, but fraud was legal.
Yes, there are stupid people in the world, but from a societal perspective, they're not as bad as the competent, but malicious, folks.
Re:Cryptocurrency is NOT an investment (Score:5, Insightful)
Having a high-trust society is vital if there is to be any type of quality of life. You need to know that someone isn't putting melamine in baby food, or the wine you have doesn't have antifreeze in it, otherwise, the society ceases to function and at best, turns to "tribes and families", not allowing any usable trade, unless forced to.
Businesses will not move or operate in low trust societies. They want to know that the roads they ship on will be maintained, that the power grid is dependable, that the water coming to their factories is up to spec. Otherwise they will just pack up and move to greener pastures.
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I think your trust is secondary in nature. I have no trust that someone doesn't put melamine in baby food. I have trust that we have a legal system in place and that they have a certain fear of being fucked over when they are caught. You can see how well this trust breaks down when the legal system fails - the flood of nasty Chinese shit imported without a local seller to hold accountable that fails to meet basic safety standards. And yet we buy that shit in droves anyway.
No I don't trust society. I margina
Re: Cryptocurrency is NOT an investment (Score:2)
Well, Syria must be a business haven then.
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Case in point.
The stock market is what it is, now, because people from the 1970s onwards were FORCED to put their "retirement funds" into it and let silver-spoon assholes gamble on the stock market with their money in 401(k)s and similar setups rather than having more traditional retirement investments and pensions...
We are reaching the limit of this. The libertarian "but waah I could have invested (so-and-so money in perfect 20/20 hindsight)" doesn't mean EVERYONE would have "won." That's why each succ
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You are neither entitled nor guaranteed to "win".
Nor should you be.
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You are neither entitled nor guaranteed to "win".
Nor should you be.
Why not? Is there something inherently bad about everybody winning? Do people NEED losers to feel good about themselves or is it only losers who feel better because someone else is an even bigger loser?
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Why should the government not pass laws against stupidity?
Anyone who falls for a scam could be considered stupid, but scams are generally illegal. I'm fine with it being illegal to be predatory like this.
Now Starmer should fucking ban gambling advertising while he's at it.
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My worry is that cryptocurrencies will end up like bad real estate debt, folded into derivatives that all the banks buy... and when those go sour, it becomes the government that has to pump the banks full of cash, effectively subsidizing the losses on the taxpayers. So, all the money made by crypto is actually money from taxpayers... effectively a welfare program.
Watch the bonuses to bankers go out in the millions after the collapse and bailout to add insult to injury.
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Spending money to gamble is no more stupid than spending money on another form of entertainment.
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Spending money to gamble is no more stupid than spending money on another form of entertainment.
Exactly right, as long as you understand you are spending money, not investing it. I know people who go to the casino with a set budget. If they win, they spend the winnings on shows, food etc that they otherwise couldn't afford. If they lose, they eat at Taco Bell. Either way, they are entertained for a weekend.
The problem with crypto is its not pitched as a gambling casino. Its described as an investment. A storehouse of value. etc. So people are being taken in by a fraud. The only saving grace is that th
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We do have many laws against stupidity, most safety rules are: "No swimming -- Sharks" signs (you will get fined if not eaten), compulsory safety belts.
Re:Cryptocurrency is NOT an investment (Score:4, Interesting)
Re: Cryptocurrency is NOT an investment (Score:2)
The potenti consequence of them losing money is either more taxes or them becoming criminal or indebted to criminals. Damages are high enough to consider measures.
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Thanks, mom!
Re: Governments just blocking access to wealth... (Score:2)
Stable coins aren't stable if the underlying assets aren't stable, and we will see a lot of stable coins going the way of the dodo over the next decade.
The fact that money is inflationary isn't a law of nature, its designed that way to prevent inherited aristocracies, for one, and to form the economy for another.
I know cryptobros aren't strong on knowledge. The damage this will do over time is going to be gigantic. But yeah, there will be a mass transfer of wealth to the extreme right and inherited wealth f
Will the UK ban leveraged trading too ??? (Score:4, Insightful)
Re:Will the UK ban leveraged trading too ??? (Score:4, Insightful)
It would be nice if every nation did.
Will they ban buying food/paying rent with (Score:3, Interesting)
borrowed funds? If not, the ban will have limited effect because money is fungible.
Now, it will prevent someone with a net worth, say, of GBP100,000 from buying GBP200,000 worth of whatever-coin, but it won't stop them from spending everything they have on whatever-coin and putting their living expenses on a credit card.
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Money may be fungible, but a person committing perjury isn't. No one here is controlling the money, they are imposing requirements on *people* under a threat of punishment. Just like how when I sent $400k overseas the first person who called me was not the receiver saying "thankyou" but a lawyer saying "You need to fill in a fuckload of paperwork". They don't care how fungible the money is, the onus is on me under threat of punishment under law to detail where it came from.
On the flip side when we bought a
It won't work (Score:2)
Crypto platforms will find some way for people to borrow/trade in CFDs, or futures, or some other intangible bullshit that skirts the rules. And that's just the legitimate ones. The ones based in Tuvalu, Myanmar or some other unregulated scam haven will just encourage people to borrow money under false pretenses for their "sure thing" platforms.
So any legislation has to mitigate for that and make it onerous for people to borrow, to transfer money or for trading platforms to exist outside of the regulation.