The value of cryptocurrency crooks’ ill-gotten gains over the first five months of this year stands at a whopping $1.4 billion, according to a report by CipherTrace, and one lawyer from Europe believes that it’s time for a fund to compensate the victims of cryptocurrency crime — despite the European Union Parliament denying to hear his first petition.

Dr. Jonathan Levy, a London-based attorney and solicitor who has previously represented Holocaust victims against the Vatican, filed a petition earlier this year asking the European Union Parliament to create a superfund for victims of crypto-crime. The petition asked the EU to consider drafting a bill that would tax cryptocurrency nodes within the continent 0.0001 cent per euro as an insurance fee for victims.

Even though only a fraction of the world’s crypto nodes are in the E.U., Levy believes that there’s enough transaction volume going through the ones that are on the continent to make it worthwhile. He also points to the success of the General Data Protection Regulation (GDPR)  — a strict set of data privacy rules that is applied to firms both in the E.U. and abroad that have E.U.-customers — on how this can go global.

“The GDPR is a good example of how an E.U. scheme more or less goes global. We don’t need 100% compliance. I believe anyone regardless of citizenship doing business with a crypto asset that touches the E.U. in some way should be covered,” Levy told Forkast News. “Another model would be to extend protection only to E.U. citizens or consumers of crypto assets that have offices in the E.U. A crypto asset could exclude itself but there is no reason to since the consumer pays the proposed .0001 cent per euro transfer fee.”  

But the Parliament’s commission didn’t agree. In its response to Levy last week, it said that the E.U. already had numerous laws on the book regarding violent crime, theft and fraud that had a nexus to one of its member states. Some of these crimes, which would include those with a cryptocurrency angle, would see its victims eligible for existing compensation funds. The commission suggested that victims “continue to pursue their respective cases through national law enforcement agencies” and “seek compensation through existing channels or with the legal persons responsible for their loss.”

“Furthermore, most losses suffered — through for example fraudulent initial coin offerings (ICOs) or hacks of cryptocurrency exchanges — occur outside of the E.U.,” the commission said in its response, concluding that it did not have competence to set up and administer such a fund considering the overlaps with existing rules in place. 

“The commission administers billions of euros in grants and credits every year and has one of the most expansive and well-trained bureaucracies in the world but cannot administer a simple victim fund which is self-replenishing,” Levy said in a statement. 

Levy argued that “the E.U. Commission itself remains a host to crypto criminality in a major way” pointing to OneCoin, the Bulgaria registered company that promised to build the “next bitcoin” and raised over $4.7 billion from investors around the world — including $35 million from the British.

“The E.U. Commission is obviously competent to administer a cryptocurrency victim fund; why it does not desire to do so however is the question,” Levy told Forkast. The answer I suggest has to do with the commission members, one representing each EU member state.  Certain E.U. members have been almost criminally lax in their prosecution of crypto criminals in particular the Baltic states, Malta, and Bulgaria. 

The company remains operational, and the U.K.’s Financial Conduct Authority has dropped its warning about the company.