UK Preparing To Ban Consumers From Buying Crypto With Borrowed Funds (theguardian.com) 46
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.
Re: (Score:3)
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.
Re: (Score:2)
Low-trust doesn't necessarily equal chaos. Warzones are chaotic and unfriendly to business but low-trust environments do just fine for businesses.
Re: (Score:2)
Well that ship has surely sailed. I'd call this a fairly low trust society at this point. We refuse to prosecute most theft (California here). We've made homeless our #1 priority and it's continued to get worse every year since that declaration (and we've exponentially increased our homeless spending, with no results).
The fact that we are so gentle with our criminals just encourages assholes to take advantage of morons. Now that the entire planet can reach grandma, she doesn't stand a chance. Her best move
Re: (Score:2, Offtopic)
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
Re: (Score:1)
You are neither entitled nor guaranteed to "win".
Nor should you be.
Re: (Score:2)
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?
Re: (Score:3)
Everyone is different but I definitely think a non-trivial subset of society does indeed need people "below them" to feel important. I'm sure you've come across those asshole managers that get off on being pricks. We've all seen the type. Assholes really do tend to thrive in our society because it's perfectly acceptable to be ruthless to win.
I'm not saying I agree with it but that's pretty much an accurate description of our society and large corporate leaders and politicians.
Re: (Score:1)
It's fundamental to humanity and tribal organization.
A Blue Man Group show has 3 players. Why? Because 3 is the minimum number of people required for someone to be an outsider, not part of a group. A lot of the humor in the show is based on one of the players being an outsider.
Any time you have insiders and outsiders, you're creating a situation where some people (the insiders) are going to feel better or superior than others (the outsiders). It's fundamental. If the outsiders were "as good" as the insider
Re: (Score:1)
Stocks and crypto are zero sum games. In order for their to be winners, there have to be losers. It's fundamental, baked into the system.
That being the case, you are not guaranteed to win, nor could you ever reasonably expect to only ever win.
Re: (Score:2)
Stocks and crypto are zero sum games.
Stocks are not a zero sum game. Stock represents a share of an organization. If the organization grows so does your share.
If you buy a share in the apples off a tree your share is determined by how many apples the tree produces. If the tree produces twice as many apples, your share has doubled. The monetary value of those apples depends on the market, but it is no more a zero sum than any other product.
By contrast, there is a fixed amount of crypto. The only thing that changes its value is the market. Some
Re: (Score:1, Troll)
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.
Re: (Score:3, Interesting)
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.
Re: (Score:2)
Someone use to post a copy-paste about this but what you describe IS in fact the end game. You position yourself as "essential, to big to fail" and reap the benefits.
Re: (Score:2)
Re: (Score:1)
Spending money to gamble is no more stupid than spending money on another form of entertainment.
Re: (Score:3)
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
Re: (Score:2)
I will say that's one thing about bitcoin I like. If the value drops dramatically, just hold your position. It's not tied to anything, so it technically will never "fail" and eventually, your money will come back with the next wave.
The whole point of crypto seems to be the greater fool concept. You get in and then you hope to get out leaving a fool with the temporary loss while you cash out to real money.
I stay away from it but I'm not really interested in gambling so it has much less appeal to me. I have s
Re: (Score:1)
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 last three times I went to casino (under 10 minutes away from our house), I went in with $300. That's what I had to spend. I play craps. My "rule" is play until I lose it, or double up. All three times, I finished ahead by about $350. After buying food, I was still ahead by $300 or more. Each time was several hours of entertainment, hanging out with one or more friends, generally fucking off. All good times. I'll be going again on Monday. Wish me luck!
Losing does suck. If feels shitty to walk about of
Re: (Score:2)
It is SO OBVIOUS that it is a scam that even the average house plant could figure it out.
What's obvious is that it is not obvious. What is obvious is that there are a lot or people who have made paper profits buying crypto. There is no reason that won't go on for as long people believe it will. Same as any other casino.
Re: (Score:2)
but banning legal gambling just creates black markets. It's better to legalize and tax
I agree, legal, but taxed and regulated. I would 100% ban all gambling advertising just like cigarette advertising, and mandate prominent warnings on apps and physical locations, just like cigarettes.
I don't see a particularly good argument for banning advertising for any legal activity either.
Corporations have no inherent right to exist, they are not people. And people (like Ea Nassir) did business for millennia without
Re: (Score:2)
We ban alcohol and cigarette ads on billboards. In fact, I can't remember the last time I saw a cigarette ad. So we can in fact ban things we deem a threat to public society.
Problem is, all our leaders are involved in crypto and will make lots of money off it while the suckers are left to hold the bag. They already insider trade as a rule, so I can't seem them really caring if stupid people (anyone but them) are left holding the bag.
Re: (Score:3)
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.
Re: (Score:2)
Your going to get taxed to enforce all these "coddle me" laws, so either way you are getting taxed. I'd like to see an all around harsher stance on criminality at all levels, but especially the c-suits. So many criminals don't deserve our mercy as they showed none to their victims. We don't need those kind of people in our society.
But unfortunately, we coddle the fuck our of our criminals and often times just give them a slap on the wrist or less. We rather make excuses for bad behavior instead of working o
Re: (Score:1)
Thanks, mom!
Re: (Score:2)
Indeed. That nicely sums it up. Seems the damage these morons are doing is now large enough that the government has to step in to save the fools from themselves.
Re: (Score:2)
At best, it's a gamble, at worst a scam
Gambling is a tax on people who are bad at math
Borrowing money to gamble is stupid
The government can not, and should not try to pass laws against stupidity
Quoted in response to the censor trolls. In this case their motivation is obvious. And selfish. And stupid.
But I disagree with your conclusion. The government has to intervene when stupidity starts harming people. I'm not saying it's easy to do, but the efforts must be made.
Or am I deluding myself (again) in these days of "BS, more BS, and 'What's in it for me?'" as the national motto. Yeah, "Truth, justice, and the American way" was not part of real life, but at least it was aspiring to something great...
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
Re: (Score:2)
Re: (Score:2)
I always find it amusing when people look at Marx and Lenin as voices of wisdom. Socialism doesn't work. The Europeans don't even practice socialism. They are all capitalist. They have social programs, but that does not remotely make them socialists. We have social programs as well.
Don't be a Fox news lemming. The definition of socialism 1) Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government tha
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:2, 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.
Re: (Score:3)
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.
Gambling with money you cannot afford to lose? (Score:2)
That is a sign of somebody who is not an adult. Seriously, we may need to stop making people adults because they were around long enough. Some minimal skills and understanding of reality really is required...
Re: (Score:2)
I love the idea but given that we let every Tom, Dick, and Harry vote, good luck with that. We let pretty much every idiot drive as well.