UK Financial Regulator Warns Against Crypto Scams As Investor Losses Hit $34M USD

News | May 21, 2019 By:

The UK Financial Conduct Authority (FCA) has issued a warning against crypto and foreign exchange scams.

In its warning, the FCA said that scams in the UK involving currencies and crypto assets totalled £27 million ($34.38M USD) in the last financial year, with average losses of £14,600 ($18,500 USD) per victim. While individual loss due to scams decreased from £59,600 to £14,600, the number of scam reports more than tripled, soaring from 530 to 1,834 in the 2018/19 financial year to early April.

“These figures are startling and provide a stark warning that people need to be wary of fake investments on online trading platforms,” said Pauline Smith, Action Fraud director. “It’s vital that people carry out the necessary checks to ensure that an investment they’re considering is legitimate.”

The FCA warned that fraudsters will use social media to promote their online trading platforms, often offering “get rich quick” schemes. Posts will use fake celebrity endorsements and images of luxury items. These links will lead to “professional-looking” websites where consumers will be persuaded to invest. Investors will be led to believe their first investment has successfully made a profit – the fraudster will then contact the victim to invest more money or introduce friends and family.

“Scammers can be very convincing so always do your own research into any firm you are considering investing with, to make sure that they are the real deal,” said FCA Executive Director of Enforcement & Market Oversight Mark Steward. “Before investing online find out how to protect yourself from scams by visiting the ScamSmart website, and if in any doubt – don’t invest.”