Diane Abbott savages bitcoin a ‘just a gigantic ponzi scheme funding ‘terror’

Diane Abbott savages bitcoin a ‘just a gigantic ponzi scheme funding ‘terror’of terrorism and promised Labour would regulate cryptocurrencies if elected.

In an explosive interview with The House magazine, Ms Abbott said that the Treasury should clamp down on the emerging technology to stop the currencies spread through the financial services.

The Labour frontbencher said: “We are looking at the bitcoin issue. One of the problems with bitcoin is the extent to which it is just a gigantic Ponzi scheme.

“And if everyone took their bitcoin money and tried to buy a new car all at once the whole thing would collapse.

“So, we are worried about the extent to which bitcoin is a Ponzi scheme 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.”

Likening emerging bitcoin technology to the larger financial markets the shadow home secretary said Labour wants, “proper regulation of financial services”.

She said: “It was poor regulation of financial services which led to the 2008 crash and obviously regulating bitcoin would be part of that.

“Generally, we are concerned about sound regulation of financial services.

“I think the people best placed to resolve some of the problems around Bitcoin will actually be people in the Treasury and people in the banking sector but I can’t say more than that.”

The subject of bitcoin arose in a larger discussion on why the war on drugs had “failed”.

During the interview Ms Abbott stressed Labour was not in favour of decriminalising cannabis for recreational use.

She said: “What we all have to accept is that the war on drugs - particularly the international war on drugs - has failed. It’s turned countries like Colombia into narcotics paradises.”

However, the shadow home secretary says treatment for drug addicts should be better funded.

She said: “I certainly think we want to make it much easier for people to get treatment who are drug addicted.

“In Hackney for instance it’s quite hard to get inpatient treatment which for some people is the only answer so certainly we need to look at better facilities for treatment for people with drug issues.

“And also, we need to weave together our work on homelessness with our work on drug addiction because many of the people you see here who are homeless are not just literally homeless they have drug and alcohol abuse problems.”