Cryptocurrency fraud cost UK investors £2 million in June and July of this year, according to Action Fraud, the government’s fraud and crime reporting center. The center received 203 reports of cryptocurrency fraud during that period, amounting to an average of £10,095 per person. “These statistics show that opportunistic fraudsters are taking advantage of this market, offering investments in cryptocurrencies and using every trick in the book to defraud unsuspecting victims,” said Pauline Smith, director of Action Fraud, adding that investors should “thoroughly research” their investments. (See also: UK Finance Regulator Warns About Cryptocurrency Investing.)
Frauds are perpetuated using social media platforms and cold calls. The calls are meant to get investors to sign up for cryptocurrency investment websites. The websites help fraudsters get personal credit card details and driving licenses in the guise of signing up for trading accounts. Such websites also ask investors for an “initial minimum deposit.” The surge in fraud related to cryptocurrencies has led to the introduction of a new course at the City of London Police’s Economic Crimes Academy (ECA).
An Evolution In Regulation?
Cryptocurrencies are not regulated in the United Kingdom. The Financial Conduct Authority (FCA) and UK Treasury Committee have begun to analyze risks and opportunities related to cryptocurrencies and are expected to roll out regulation related to them in 2019. (See also: UK Government Launches Cryptocurrency Task Force.)
A July report by a UK consortium laid out the case developing UK’s potential in blockchain technology. Approximately £500 million worth of investments have already been made in this sector during the last year. “The UK is starting to demonstrate significant potential to become a leader in blockchain technologies and crypto economy,” the report’s authors stated. “The gap between the world of traditional finance and crypto economy remains, but in the coming years we can expect this to lessen and eventually disappear.”
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