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Cryptocurrencies

Crypto scams triple, with GBP 27 mln total cost to victims

Tuesday 21 May 2019 | 12:56 PM CET

Investment scams involving cryptocurrencies trading have tripled in a year, with the average victim losing GBP 14,600, as per UK-based Financial Conduct Authority.

The regulator and the police-run body Action Fraud are warning the public to be wary of these scams, as they typically promise high returns. These are often carried out via bogus online trading platforms. Also, according to FCA, more than GBP 27 million was lost to frauds involving so-called crypto-assets and forex investments in 2018-2019. The number of scams reported more than tripled in 2018 to 1,834 from 530 in 2017-2018.

FCA mentions that fraudsters often used social media to promote their online trading platforms. Posts use fake celebrity endorsements and images of luxury items, that link to professional-looking websites where consumers are persuaded to invest. Also, investors will be led to believe that their first investment has successfully made a profit. After that, the fraudster will contact the victim to urge them to invest more money or introduce friends and family. However, eventually the returns stop, the customer’s account is closed, and the scammer disappears with no further contact.

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