The number of crypto-related investigations by UK’s financial watchdog the Financial Conduct Authority (FCA) has increased by 74 percent from the same time in 2018. In 2018, just 50 crypto firms were being investigated by the FCA.
“The spike in numbers reflects the FCA’s increasingly hands-on and no-nonsense approach to the cryptocurrency industry,” David Heffron, partner at law firm Pinsent Masons, said.
Fraudsters tend to use social media to promote their schemes, often using fake celebrity endorsements and images of luxury items to lure naive investors.
This May, the FCA warned that there had been a three-fold rise in reports on cryptocurrencies and forex scams: the 1,800 scams in 2018-2019 have led to a loss of £27 million ($33.2 million).
Given that cryptocurrencies like bitcoin and ether, which the FCA classes “exchange tokens,” are not regulated by the FCA, United Kingdom residents who invested in this coins are not protected by the regulatory framework.