- According to the FCA, the number of crypto-related scams increased substantially in the last year
- A total of $34 million was lost to these scammers
- The scammers used attractive and professional-looking websites to trick victims
While there are a number of factors that help stimulate the growth of the crypto industry, there are other things that have the opposite effect such as scams. While all industries experience scams, crypto is particularly vulnerable because it is an emerging industry that isn’t fully matured yet. As such, scams such as SIM swapping and crypto jacking run rampant.
Unfortunately, according to a May 21 report, cryptocurrency-related scams have tripled in the last year and led to a $34 million loss to consumers in total. This Information came via the UK’s Financial Conduct Authority.
Besides the report that was released, the regulator along with the Action Fraud body has issued a warning to the general public to be aware and cautious regarding these scams and also give some guidelines as to how to identify them. According to the report, some common signs are business opportunities that promise unusually high return and most of these activities are carried out on shady and bogus online trading platforms.
1800 separate scams reported
For the year 2018 to the Year 2019, over $34 million was lost in various crypto-related scams as well as forex scams. The term crypto asset being used is the blanket term which describes a broad range of assets that tie back into the crypto industry.
However, the FCA has stated that bitcoin and litecoin are the most popular tokens asked for and they are referred to as exchange tokens. From 2017 to 2018, 530 scams were reported to the FCA but from 2018 to 2019, the number has gone up to 1,834.
One thing to note is that the scammers in question take advantage of the popularity of social media and peddle their schemes as get-rich-quick opportunities. They even go as far as to make use of fraudulent claims of being endorsed by celebrities as well as various images of luxury items in order to gain the attention of the public as well as their trust.
Fake profits to encourage further ‘investments’
Those who fall for these scams are tricked into thinking that their first investment has made a profit. Then, they will be asked to bring their friends and family to invest in the scam but after a while, returns will stop coming in and then the customer’s account is closed with no further contact being made from the scammers.
Even as law enforcement becomes more skilled in catching these criminals, it is up to the public to be aware of their activities and be cautious in order not to fall for them.
