According to the latest report, Cryptocurrency and Foreign exchange scams in the U.K are increased three times as compared to the last year. Scams have reached to 1,834 from 530 in last year, as per the country's financial watchdog.
The main Financial Regulator in the United Kingdom, the Financial Conduct Authority (FCA), states that the crypto investors have lost more than $34 million because of cryptocurrency and forex scams from 2018 till now, the report was shared by Financial Times on May 20.
As per data collected from Action Fraud, the Financial Conduct Authority (FCA) declared Tuesday, even though the number of reported cases are being increased, total reported loses has been decreased from £38 million ($48 million) to £27 million ($34 million). Here, the average individual loss has been reduced from £14,600 ($18,575) from £59,600 ($75,827).
Most of the reported cases were linked with the Cryptocurrency scams, the regulator stated.
Pauline Smith, who is Action Fraud Director said,
“These figures are startling and provide a stark warning that people need to be wary of fake investments on online trading platforms. It’s vital that people carry out the necessary checks to ensure that an investment they’re considering is legitimate.”
According to the report, the FCA is considering a ban on high-risk derivative products which are connected to the crypto assets. Mark Steward, Executive Director of FCA said,
“Scammers can be very convincing so always do your own research into any firm you are considering investing with, to make sure that they are the real deal.”
Scammers highly use social media platforms in order to promote their "get rich quick" schemes, mainly using photos of celebrities with fake endorsements along with photos of luxury goods such as cars and watches. Investors were forced to believe that their first investment will turn into a profit.
Previously this year, the FCA released a Survey, stating that around 73% of U.K customers don't know what is a cryptocurrency, then also a lot of users become a victim of such schemes after being attracted due to profits. The regulator at that mentioned it might consider banning the sale of some of the cryptocurrency derivatives in the near future.
The FCA has alerted a few times on crypto derivatives products and unregistered crypto brokerage firms. The firm is working with the U.K Government and the Bank of England, as the main part of the country's crypto assets taskforce in order to create new regulatory guidelines for crypto space.