The amount of money that has reportedly been lost to cryptocurrency fraud so far this year is already a third higher than for the whole of 2020, according to new figures.
Crypto fraud has racked up a more than £146m tab, Action Fraud has found, which has seen the average loss per victim climb to an eyewatering £20,500.
Phony endorsements from celebrities like Kim Kardashian have been on the rise, with the chair of the Financial Conduct Authority (FCA) warning investors last month to not take crypto advice from social media influencers.
“Social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation. Some influencers promote coins that turn out simply not to exist at all,” the City watchdog’s Charles Randell said at the Cambridge international symposium on economic crime.
Action Fraud received 558 investment fraud reports in the months between April 2020 and March 2021 which referenced a ‘celebrity endorsement’.
City of London Police Temporary Detective Chief Inspector Craig Mullish said: “Reports of cryptocurrency fraud have 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.”
An increasing number of advertisements for cryptoassets have not been authorised by the FCA, which leaves those frauded particularly vulnerable.
Fooled investors will not have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme if investments go awry, which is why the FCA has a register which potential investors can check to ensure they are dealing with an authorised firm.
Source: City A.M.