Losses from cryptocurrency frauds are expected to increase in 2022: Report | The Financial Express

Losses from cryptocurrency frauds are expected to increase in 2022: Report

According to Cointelegraph, around half of the report is a survey on cryptocurrency assets, post which the authors state the risks for users

Losses from cryptocurrency frauds are expected to increase in 2022: Report
The “Action Plan to Address Illicit Financing Risks of Digital Assets” makes approach towards digital assets with respect to national security

The United States Treasury Department published three publications with regard to digital assets, on account of US President Joe Biden’s executive order for ensurance of responsible development of digital assets. While one plan lays focus specifically on cryptocurrency assets, another emphasises on removal of illicit finance risks, as reported by Cointelegraph. 

“The potential for blockchain technology to transform the provision of financial services, as espoused by developers and proponents, has yet to materialize,” the report stated. 

According to Cointelegraph, around half of the report is a survey on cryptocurrency assets, post which the authors state the risks for users. The report has separeted the risks factor into three categories which include conducting of risks within the ecosystem, with losses from cryptocurrency frauds increasing in 2021 and are expected to go past the losses for this year. The report also focuses on transparency problems of different kinds, and mentions operational risks which refer to drawbacks in information systems or internal processes, human errors, governance and management failures, or disruptions from external events. Separately, the mention of cryptocurrency-asset intermediation risks is there which refer to risks faced by investors in traditional markets such as volatility and custody issues. The report specifies a discussion around opportunities and risks which cryptocurrency assets pose for vulnerable positions due to presence of statistical information in the section.

Moreover, Cointelegraph noted that the report makes three suggestions, which include vigilant monitoring, with increased enforcement, interagency cooperation and information sharing, for agencies to produce guidance and rules on account of greater educational outreach. The “Action Plan to Address Illicit Financing Risks of Digital Assets” makes approach towards digital assets with respect to national security. Furthermore, it provides recommendations on seven priority actions which include monitoring and enforcement, nationally and internationally. It also states the updating of Bank Secrecy Act regulations and increase in engagement with the private sector through publication of official documents, discussions and Treasury programs to ensure public-private and private-private information transfer.  

(With insights from Cointelegraph)

Also Read: Block-the-talk; Punit Agarwal of KoinX on why blockchain can ensure safe execution of transactions through digital assets

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