So far this year, the amount of money that has been lost to cryptocurrency fraud stands at over $146 million. This is already a third higher than figures from last year. The average loss per victim is $20,500.
The latest figures for crypto-fraud are significantly higher than previous year’s and suggest that more may need to be done to regulate the digital asset. Crypto fraud in 2021 has been helped by phony endorsements from celebrities such as Kim Kardashian. Last month, the Chair of the Financial Conduct Authority warned people not to take investment advice from social media influencers.
The City Watchdog’s Charles Randell spoke at the Cambridge International Symposium on Economic Crime, “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.”
In the months between April 2020 and March 2021, Action Fraud received 558 investment fraud reports which referenced celebrity endorsement. Craig Mullish, City of London Police Temporary detective Chief Inspector, siad, “Reports of cryptocurrency fraud have increased significantly over the past few years, which is unsurprising given everyone is spending more time online.”
Adding, “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 unauthorised advertisements for crypto assets have appeared online recently. These adverts leave investors particularly vulnerable to fraud. If these investments go wrong, those who have traded in them will not have access to the Financial Ombudsman Service or the Financial Services Compensation Scheme. The FCA has a register which traders can use to ensure that they are dealing with an authorised firm.
