UK financial watchdog warns investors after £27m lost to crypto scams

Cryptocurrency and foreign exchange (forex) scams tripled in the last financial year, according to new data from the UK financial watchdog, the Financial Conduct Authority (FCA.) Total losses from fraudulent online trading platforms totalled £27 million ($34 million), the authority reported on Monday. The vast majority of which—some 81 percent of claims—were due to cryptocurrency scams.

- Advertisement -

The FCA warns that fraudsters are still using social media, fake celebrity endorsements and images of expensive cars and watches to tempt gullible would-be investors. The news will come as no surprise to anyone familiar with the crypto world. Decrypt reported this kind of activity was still running rampant in late 2018, and shows no signs of abating this year.

“Criminals follow the money, and this report from the FCA shows they are taking advantage of consumers’ lack of understanding about crypto assets,” Kevin Murcko, CEO of crypto exchange CoinMetro, told Decrypt. “The key message for investors is to always do your own research, and if an investment sounds too good to be true, it probably is.”

However, while the the number of claims rose from 530 to 1,834 in the 2018/19 financial year ending in early April, the FCA said that average individual losses dropped from £59,600 to £14,600. Overall, total losses fell from about £38m to £27m.

In the report, cryptocurrency activity has been grouped with forex, as the two hold similar opportunities for fraudsters. “The same scams have been operating in forex, long before cryptocurrencies hit the headlines. It is about targeting individuals with promises of high profits. This is the same old fraudulent activity but in a new guise,” said Murcko.

The FCA is part of the UK government-led Cryptoasset Taskforce, established in 2018, whose job it is to crack down on fraud. A consultation on the Taskforce’s purview is currently underway, with one of the outcomes allowing the group to police a larger part of the crypto industry. In the meantime, the watchdog is considering a ban on high-risk derivative products linked to cryptoassets for UK investors. These, it says, often result in the heaviest losses to investors.

- Advertisement -

While the crypto winter may be behind us, crypto’s dark underbelly is still going strong.

 

Source

Previous Articles:

- Advertisement -

Latest

Crypto Market Stays Greedy Despite Israel-Iran Tensions, Bitcoin Dips

The Crypto Fear & Greed Index remained in the "greed" zone, with a score of 60, after Israel's recent airstrikes on Iran.Bitcoin dropped 2.8%...

Bitcoin ETFs See $1.3B Inflows Despite Israel-Iran Conflict Fears

Bitcoin ETFs reported five straight days of capital inflows despite ongoing geopolitical tensions between Israel and Iran.Total inflows reached over $1.3 billion from June...

Cardano ADA Falls as Whales Sell, Foundation Launches Originate

Cardano's ADA token declined 1.71% in 24 hours, stabilizing at $0.62 after a period of significant selling pressure from large holders. Whales reportedly sold over...

CRYPTO MINING FIRM Offers Daily Cloud Mining Profits, Cash Bonuses

Cloud mining through CRYPTO MINING FIRM enables users to generate Passive income with cryptocurrencies.The platform offers contracts with varying investment sizes, with daily profits...

DHS and ICE Expand AI Surveillance, Raising Privacy Concerns

The Department of Homeland Security and U.S. Immigration and Customs Enforcement are increasing their use of Artificial Intelligence to monitor immigrants and U.S. citizens. Military-grade...

Must Read

10 Best Crypto Audiobooks You Don’t Want to Miss

So, you are getting tired of reading books and you want to switch to audiobooks that talk about cryptocurrencies. Well, today we are going...