The UK has recorded losses to crypto fraud surpassing £300,000,000 (year-end March 31, 2023), according to Britain’s fraud reporting agency which is an extreme 40% increase over the past year. Crypto related fraud accounted for more than 40% of all reported crimes in England and Wales last year.
Companies like Tesla and Square have added Bitcoin to their balance sheets, signalling confidence in its value. Additionally, traditional banks are exploring ways to offer crypto services to their clients, paving the way for greater accessibility and acceptance of digital currencies.
Whilst this is generally a good thing for the evolution of cryptocurrency, it opens the door for scam artists and professional fraudsters to take advantage of those looking to invest.
Unfortunately, most consumers tend to know very little when it comes to how digital currency works or how to keep their digital assets safe. Since cryptocurrency payments do not come with any legal protections or government assurances, crypto scams are especially attractive for thieves.
Below, one of our solicitors, Grace, has put together a comprehensive list of scams to be aware of and to read through if you believe you may have been scammed or know someone who potentially has been.
Business Opportunity
This scam can play out in several ways, but it typically takes place when someone contacts you with a business opportunity with the promise of helping you becoming rich. In most cases, they claim to provide you with exceptional returns, even doubling or tripling your crypto assets overnight.
Fake Job Listing
Fraudster will create fake job listings and the “jobs” they are hiring for, are often in the crypto field, including things like crypto mining and recruiting other crypto investors.
Phishing Scams
Phishing scammers often create fake cryptocurrency exchange websites or send deceptive emails posing as trusted companies, luring victims into revealing their credentials or transferring funds to malicious addresses
Ponzi Schemes
Ponzi scams promise high returns on investment by using funds from new investors to pay returns to earlier investors. Cryptocurrency Ponzi schemes typically operate through fake investment platforms
Fake ICOs
These involve fraudulent projects that raise funds through token sales, promising investors high returns or future utility of their tokens. However, many of these projects turn out to be scams, with no intention of delivering on their promises
Pump and Dump Schemes
Pump and dump scams work by inflating the price of a cryptocurrency through coordinated buying (pumping), followed by selling off (dumping) at a profit once the price has risen.
Exit Scams
Occur when cryptocurrency projects or platforms abruptly shut down, with the operators disappearing with investors’ funds. These scams often involve fraudulent exchanges, investment schemes, or lending platforms that entice users to deposit funds, only to vanish without warning.
Social Media
Fraudsters pose as trusted individuals or support staff to trick victims into providing access to their cryptocurrency wallets or sending funds to fraudulent addresses. This could happen through Facebook, X, Instagram, dating sites and most platforms on the internet.
Romance Scams
With romance scams, the scammer pretends to become your love interest online, usually by lying about themselves. The fraudsters spend months getting you to build up romantic feelings for them, at which point they ask for crypto payments or lure you into investing crypto with them
If you feel like any of the above might relate to you or you are unsure about a situation that ‘just doesn’t feel quite right’ please get in touch.
