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Expert Warns Of UK Financial Losses If Firms Taking Crypto As Payment Fail

A U.K.-based insolvency expert says crypto could be dire for the government, The Guardian reports.

The reason is because so much of crypto is untaxed and untraceable. This can prevent transparency and encourage fraud when businesses go belly-up.

Some of the myriad companies that have begun accepting crypto alongside traditional cash or card payments include Lush, the ethical cosmetics firm, and WeWork, the office-sharing firm.

The shift has been welcomed by those who celebrate crypto. But traditional finance experts warn that the new focus on crypto could also prove an easier way for criminals to hide cash from the law. With these developments, some like Julie Palmer, a managing director at insolvency firm Begbies Traynor, have said it will now be more difficult for administrators, in charge of seeing businesses through failures, to track where the money has come from or see where anyone has been taking money illegally.

Palmer said new regulations and taxation plans to help rein in crypto are needed.

Usually, criminals looking to conceal their money would go through a process of setting up a new investment vehicle like an offshore trust.

But this isn’t so much the case in recent years, in which virtual wallets have been used to move funds deftly and commit fiscal crimes. Palmer told The Guardian that there was nothing the insolvency profession could really do. Instead, there would have to be work from the U.K. authorities to ensure that crypto is properly regulated and taxed.

On July 13, PYMNTS reported that U.K. authorities had seized $249 million in a cryptocurrency-related raid, which represented the largest amount in the country’s history thus far.

The report said the crypto had been seized “by the force’s economic crime command, after pursuing intelligence received about the transfer of criminal assets.”

“The seizures formed part of an ongoing investigation into international money laundering,” the report said.

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