EXCL Diane Abbott: Labour would crack down on Bitcoin 'Ponzi scheme'

Posted On: 
1st March 2018

Labour would crack down on Bitcoin because it is “a gigantic Ponzi scheme”, Diane Abbott has revealed.

Diane Abbott said Labour wanted "proper regulation" of financial services including over Bitcoin
Credit: 
PA Images

The Shadow Home Secretary said the party was concerned about terrorists and criminals using cryptocurrencies to fund their illicit activities and duck the law.

Fears have emerged that Bitcoin and other digital currencies like it could become the capital of choice for jihadist groups, money launderers and other offenders keen to stay below the radar.

EXCL Treasury committee MP says Bitcoin tech could save lives in NHS

John Mann MP: Bitcoin's blockchain technology could have huge impact on how the NHS works

Ministers plan Bitcoin crackdown amid money laundering fears

Drugs, weapons and child pornography are all said to be available in exchange for crypto cash using the so-called Dark Web.

Meanwhile, the WannaCry ransomware attack that hit the NHS last May offered to free machines for a fee paid in the currency.

Ms Abbott revealed that Labour was looking into the movement of funds using Bitcoin and their possible links to criminality in an interview with the House Magazine.

She said: “One of the problems with Bitcoin is the extent to which it is just a gigantic Ponzi scheme...

“If everyone took their Bitcoin money and tried to buy a new car all at once the whole thing would collapse.”

She added: “But we are certainly worried about how in the here and now it is being used to fund terrorist activity and that is something we are looking at.”

Ms Abbott said Labour would impose regulations on digital currencies the way Jeremy Corbyn vowed to curb the power of financial services last month.

“Labour overall thinks it’s important to have proper regulation of financial services,” she explained.

“It was poor regulation of financial services which led to the 2008 crash and obviously regulating Bitcoin would be part of that.”

The Government has announced its own plans to crack down on Bitcoin by forcing trading exchanges to disclose the identities of their users and report suspicious activity.

A Treasury spokesman said last year: "We intend to update regulation to bring virtual currency exchange platforms into Anti-Money Laundering and Counter-Terrorist Financing regulation.”

WAR ON DRUGS 'NOT WORKING'

Elsewhere in the interview Ms Abbott said Labour would not legalise cannabis for medicinal or recreational use ahead of the next general election.

But in a blast at current policy she said: “The war on drugs isn’t working internationally.”

And she added: “We are not seeing in this country falling numbers of addicted people.

“So I think we do have to look at what we are doing and what’s working and what’s not working as the case may be.”

Ms Abbott suggested better access to treatment, improved rehab facilities and more joined-up working on homelessness and substance abuse will be championed by the party as ways forward.