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Crypto scammers pocketed £30m as Bitcoin bubble burst

Reports on previous year more than triple as victims lose £14,600 on average over last financial year

Crypto scammers pocketed £30m as Bitcoin bubble burst

Almost £30 million was lost to crypto and currency scammers last year as the number of attempted frauds in the sector tripled to 1,800.

The estimate was issued by the Financial Conduct Authority, in association with specialist policing unit Action Fraud.   

Action Fraud said during a period between 2018 and early 2019 victims lost over £14,600 on average.

That followed the collapse in the price of crypto bellwether Bitcoin from a peak of $18,690 in late december 2017 to a low of $3,201 a year later. The price has since recovered to $7,775.

Mark Steward, executive director of enforcement and market oversight at the FCA, stressed that investors should not commit their money to any transaction if they doubt the authenticity of the platform.

He warned: 'We’re warning the public to be suspicious of adverts which promise high returns from online trading platforms.

'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.

'Before investing online find out how to protect yourself from scams by visiting the ScamSmart website, and if in any doubt don’t invest.'

the total number of scams reported was more than triple the 530 reported in the previous year.

Con artists use social media to advertise their scams and forge celebrity endorsements to give the scams an extra layer of authenticity, the FCA explained.

Those who click on the links are taken to a professional-looking website where they are convinced to invest.

They are led to believe that the first investment was successful. The fraudster will then ask the victim to invest more or introduce friends and family with the promise of more success.

In the end, the account is closed, the returns stop and the scammer vanishes with the victim's money.

Sarah Coles, personal finance analyst at Hargreaves Lansdown said investors should always have some scepticism when approached with a 'too good to be true' offer.

She said: 'The simplest way to stay safe is to bear in mind that if anyone is offering incredible overnight returns without risk, it’s a scam.

'If a company approaches you out of the blue, through social media or on the phone, it pays to start with scepticism – even if a trusted face seems to be fronting it.

'Check the firm is registered with the FCA, and use the contact details on the register to get in touch – just in case scammers are impersonating a reputable brand.'

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