UK Authority Says Scams Involving Cryptocurrency Tripled Last Year

The Financial Conduct Authority (FCA) of the United Kingdom data has shown that there has been a tripling of the number of investment scams related to crypto currencies such as bitcoin as well as in foreign currency trading. The FCA claimed that the average victim of those scams have lost about £14,600 in the year.

The general public has been suggested to be wary by the UK regulator and the police-run body Action Fraud. The typical modus operandi of the scams involve promises of high returns being made by the scamsters and is conducted through false online trading platforms, the bodies informed the people and urged them to be more vigilant against such promised online. The FCA said that in 2018-19, more than £27 million was stolen by frauds operating with the so-called crypto-assets and forex investments.

A number of different types of products are included in the broad term that is called crypto-assets. Tokens such as bitcoin and litecoin are amongst the most popular of such crypto-assets. These are called “exchange tokens” by the FCA even though they are popularly referred to as cryptocurrencies, cryptocoins or payment tokens.

According to the data from the FCA, there was more than tripling of the number of such scams that were officially reported last year at 1,834, compared to 530 such incidents in 2017-18.

The FCA said the social media was often used by the fraudsters to propagate their “get rich quick” online trading platforms. The scammers enticed the vulnerable by using posts containing faked pictures of celebrities endorsing the products and images of luxury items such as expensive watches and cars. Consumers were tempted to click on links that took them to the professional-looking websites where further enticement of the victims was done to invest.

The scams also often made the investors believe that they are making a profit on their first investment which prompted them to make further investments. This was done by trying to coax the investors into making more investments by often contacting them personally over telephones or over e-mails. Victims were also urged to introduce their friends and family members to explain the project and make investments there. However, the returns would stop coming after a certain period of time. The scammers closed the accounts of the customers and the scammer disappeared without leaving a trace to be contacted again.

(Adapted from TheGuardian.com)



Categories: Creativity, Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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