Cryptocurrency scams triple in a year – costing victims £27m
The number of investment scams involving cryptocurrencies such as bitcoin and foreign currency trading has tripled in a year, with the average victim losing £14,600, according to the Financial Conduct Authority (FCA).
More than £27 million was lost to frauds involving cryptocurrencies and foreign exchange investments in 2018/19, said the FCA, and the number of reported incidents more than tripled from 530 in 2017/18 to 1,834.
Fraudsters typically use social media to promote bogus online trading platforms that promise high returns. The FCA sad posts often used fake celebrity endorsements and images of luxury items, such as expensive watches and cars, that link to professional-looking websites where consumers are persuaded to invest.
Investors are often be led to believe their first investment has successfully made a profit. The fraudster will then contact the victim to urge them to invest more money or introduce friends and family, but eventually the returns stop, the customer’s account is closed and the scammer disappears with no further contact.
The FCA and the national fraud and cybercrime reporting centre Action Fraud have now issued fresh warnings to the public to be wary of these scams.
“We’re warning the public to be suspicious of adverts which promise high returns from online trading platforms,” said Mark Steward, the FCA’s executive director of enforcement and market oversight.