Arab Press

بالشعب و للشعب
Saturday, Feb 22, 2025

Cryptocurrencies could lead to ‘limitless’ losses for UK government

Cryptocurrencies could lead to ‘limitless’ losses for UK government

Experts warn of danger of untraceable funds if companies accepting payments in cryptos go bust
The government could face “limitless” losses as a result of businesses that accept payments in untaxed and untraceable cryptocurrencies going bust, an insolvency expert has warned.

A growing number of companies, including the ethical cosmetics firm Lush and office-sharing firm WeWork, have begun taking payments for goods and services in cryptocurrencies such as bitcoin, alongside debit payments, credit or cash.

But while the shift has been welcomed by crypto-enthusiasts, experts said it could be an easy way for directors to hide cash from authorities, particularly when companies go bust.

Julie Palmer, a managing director at insolvency firm Begbies Traynor, said the growing popularity of cryptocurrency payments would make it harder for administrators – who are in charge of winding down a business after it fails – to track where money has come from, and whether owners, staff or directors are stripping funds out of the business illegally.

It means criminals could walk away with income that would usually be clawed back and distributed to creditors, including the tax collectors at HM Revenue and Customs and local authorities.

Palmer said that without new regulations and taxation plans, the government could face huge losses. “The potential is limitless, depending on how popular this becomes,” she warned.

It is the latest threat emerging from the rising popularity of cryptocurrencies, which have been linked to money laundering and black market dealings.

Criminals hoping to conceal wealth from tax collectors and administrators have traditionally had to go through the onerous process of setting up an investment vehicle, such as an offshore trust, to hide cash. In recent years, it has become easier for small businesses, tradespeople and criminals to accept payment in cryptocurrency by setting up “virtual wallets” online.

With trusts, “at least we could see the source of that money and where it’s gone”, Palmer said. But with cryptocurrencies, which are harder to trace, “we’ve got even less of a chance of actually tracing that and seeing the money that’s been taken out”.

Palmer said there was nothing the insolvency profession could do to tackle the issue on its own and believes UK authorities – who are a “year or two behind” the US on the issue – should take action and introduce laws to ensure crypto-assets are properly regulated and taxed. “It’s potentially a major loss of income tax revenue,” she said.

HMRC said it recently released a manual outlining the tax consequences of different types of crypto-asset transactions.

An HMRC spokesperson said: “We take action, including using powers provided by parliament to gather data from a range of information sources, to identify and investigate those that have failed to declare all their income and gains, ranging from individuals operating in the hidden economy, through to sophisticated organised crime groups and offshore structures used to hide earnings and other assets.”

The Treasury is reviewing evidence from a consultation on how to regulate crypto-assets.

The review is taking place at the same time as the Bank of England and the Treasury weigh up the possibility of digital assets being integrated into the UK’s monetary system, potentially via a Bank-issued asset sometimes dubbed “Britcoin”.

While the Bank has signalled that it is open to the idea, its chief economist Andy Haldane has dismissed as fanciful the idea that existing cryptocurrencies such as bitcoin could become a standard payments mechanism.
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
The negotiation teams of Trump and Putin meet directly, establishing the groundwork for a significant advance.
Israeli Minister Urges Hamas to Surrender and Depart from Gaza.
Iran Considers Moving Its Capital Due to Urban Difficulties
Israel and Hamas Finalize Sixth Exchange of Hostages and Prisoners During Continuing Gaza Ceasefire
Leaders of BRICS to Gather in Rio de Janeiro for July Summit
Muhsin Hendricks, a trailblazing openly gay imam, was killed in South Africa.
Trump's special envoy for hostage affairs cautions Hamas against challenging Trump before Saturday's deadline.
Two British citizens apprehended in Iran amid escalating tensions.
Israel Issues Threat of Military Action as Hostage Negotiations with Hamas Continue
Hamas Coordinates Worldwide Solidarity Marches in Reaction to U.S. and Israeli Initiative
Israel Warns of Ending Gaza Ceasefire Due to Hostage Situation
King Abdullah II Dismisses US Proposal to Relocate Palestinians, Commits to Welcoming Gaza Children.
Lebanon Installs New Government with Hezbollah's Impact on Key Ministries
Report: Iran Attempted to Assassinate Trump During Election Campaign
U.S. Authorizes $7.4 Billion Arms Sale to Israel
Iran's Supreme Leader Rejects Nuclear Negotiations with the U.S.
UN Chief Denounces Trump's Gaza Plan, Cautions Against Ethnic Cleansing
Pressure Intensifies for a Free Trade Agreement between the UK and GCC in Light of Economic Difficulties
Israel to Withdraw from UN Human Rights Council Due to Accusations of Anti-Semitism
EU Reaffirms Gaza's Essential Role in Future Palestinian State Following Trump's Proposal
Iranian Currency Reaches All-Time Low Amid US 'Maximum Pressure' Initiative.
UN Reaffirms Ban on Deportation from Occupied Territories Amid US Gaza Proposal
Palestinians Fear Repeat of 'Nakba' Amid Ongoing Crisis in Gaza
UAE Aids in the Exchange of 300 Prisoners Between Russia and Ukraine
Egypt Seeks Global Backing for Two-State Solution Following US Proposal for Gaza Plan
Trump's Suggestion to 'Seize Control' of Gaza Represents a Significant Shift in US Policy
French President is the first EU leader to extend congratulations to the new Syrian President.
Tunisian President Appoints New Finance Minister Amid Economic Crisis
Trump Suggests U.S. 'Takeover' of Gaza, Prompting Global Worries
Trump's Proposal for Gaza Provokes Global Debate
President Trump Suggests Moving Gaza's Palestinian Population
Aga Khan IV, Spiritual Leader and Philanthropist, Dies at 88
Erdogan and Syria's Sharaa Talk About Collaboration to Counter Kurdish Militants
Trump Suggests U.S. Control of Gaza Strip Amid Ongoing Conflict
Trump Resumes 'Maximum Pressure' Strategy to Limit Iran's Oil Exports.
Ex-British Soldier Sentenced for Espionage on Behalf of Iran and Fleeing from Prison
Gazans in Egypt Reject Displacement, Struggle with Return to War-Torn Home
Queen Rania Urges Protection of Children’s Rights at Vatican Summit
Hamas Officials Ready to Begin Negotiations for Phase Two of Gaza Truce
Trump Expresses Caution Over Gaza Ceasefire as Netanyahu Visits Washington
Oman to Host 18th Indian Ocean Conference on Maritime Security and Trade
Emir of Kuwait Meets BlackRock CEO for Talks on Investment Opportunities
Queen Rania of Jordan Calls for Global Action on Children’s Rights at Vatican Summit
Egyptian President El-Sisi Invited for White House Meeting Following Jordanian King’s Visit
Queen Rania Calls for Protection of Children’s Rights at Vatican Summit
Israeli Military Operations Continue on Lebanon Border Amid Ceasefire Tensions
Israeli Hostage's Release Highlights Uncertainty Over Family's Fate
Israeli Military Operations Escalate in Southern Lebanon Amid Hezbollah Tensions
Zayed Award for Human Fraternity Announces 2025 Honorees
Kuwait Anticipates a 12% Increase in Budget Deficit for the 2025-2026 Fiscal Year
×