UK’s financial watchdog the Financial Conduct Authority is warning consumers about rising of cryptocurrency scams in the country.
Given that cryptocurrencies are not regulated by the FCA, United Kingdom residents who invested in Bitcoin or Altcoins are not protected by the regulatory framework.
In June, FCA issued the first warning on cryptocurrency scams. The warning message has been re-posted by the UK regulator to let consumers know that fraudulent schemes are on the rise.
“UK consumers are being increasingly targeted by cryptocurrency-related investment scams. Cryptocurrency fraudsters tend to advertise on social media, often using the images of celebrities or well-known individuals to promote cryptocurrency investments. The firms operating the scams are usually based outside of the UK but will claim to have a UK presence, often a prestigious City of London address.”
A report by the National Fraud and Cybercrime Reporting Centre said that approximately £2 million has been lost in cryptocurrency scams in June and July alone this year, an average of £10,095.59 per person. The statement noted that the most prevalent methods used by scammers are cold calls and social media-based campaigns.
Fraudsters are able to persuade victims to sign up to their websites and provide sensitive information such as credit card details and driving licenses to open a trading account. Victims are then persuaded to make sizable first deposits before realizing it is a fraud. To date, the regulator announced it has launched investigations into 24 different cryptocurrency companies.