Cryptocurrency fraud rises by 30% in 2021

Cryptocurrency fraud rises by 30% in 2021

Cryptocurrency fraud rises by 30% in 2021 as the amount of money lost by victims to scams now stands at $200.7 million which is 30 percent higher than the figure recorded in 2020. The average loss per victim was just over $28,000.

The report released by Action Fraud, shows that individuals within the age bracket of 18 and 45 formed the majority of the victims. It is a study of 7,118 crypto fraud incidents since the beginning of 2021.

It further stated that most victims often fall for the bait of high returns by these fraudsters on social media, who use fake celebrity endorsements in advertising their scam investment schemes. These endorsements often appear with a picture of a celebrity to make the investment look genuine.

Many firms advertising and selling investments in crypto assets are not authorised by the Financial Conduct Authority (FCA). And so victims who fall prey of fraudulent cryptocurrency investment will not have access to the Financial Ombudsman Service (FOS) or the Financial Services Compensation Scheme (FSCS).

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Craig Mullish, Temporary Detective and Chief Inspector from City of London Police said, `Reports of cryptocurrency fraud has increased significantly over the past few years, which is unsurprising given everyone is spending more time online.

“We would encourage anyone thinking about making an investment to do their research first and to stop and think before making an investment as it could protect you and your money.’’

He advised prospective investors to always check the FCA register and the FCA’s warning list of firms to avoid, before investing their funds to ensure such firms were authorised.

Action Fraud, is the United Kingdom’s national reporting centre for fraud and cybercrime.

Over 558 investment fraud reports were received between April 2020 and March 2021 by Action Fraud which made reference to a bogus celebrity endorsement with 79 per cent of reports mentioning cryptocurrency as the commodity they invested in.