Crypto scams price Britons practically £200m prior to now yr

The total value of cryptocurrency scams nudged close to £200million in the past year, new data shows.

In total, 9,850 individuals were scammed out of £186million by crypto scammers in the year to 31 October, analysis by communications consultancy Mattison shows.

The number scammed ticked up from a year earlier and is likely to have ballooned further as interest in bitcoin and alternative coins ride another wave thanks to the price recently hitting record highs.

The so-called ‘Trump-trade’ saw bitcoin surpass $100,000 for the first time.

Scammers are capitalising on the increase in interest, advertising fraudulent investment schemes, many of which use false celebrity endorsements to ensnare unsuspecting victims.

This is Money was previously contacted by a reader who was duped by a scam supposedly endorsed by Amanda Holden, and also highlighted the use of the image of England football player Harry Kane as part of a crypto scam.

Fleecing the public: Crypto scammers have stolen almost £200million from UK investors

Unlike scams where fraudsters manipulate victims into sending them money, crypto scams are not protected by new rules on authorised push payment scams that require banks to reimburse victims. 

This is because victims will be asked to transfer money themselves to their own crypto wallet, before it is stolen by scammers.

Scammers increasingly employ the use of cryptocurrency as it is more difficult for transactions to be traced than traditional money transfers.

Many of these scams utilise sophisticated investment platform websites, which are in fact a front for scam activity. 

While victims can see their investment rising and falling over long periods of time, the reality is that none of the money they have committed is ever invested, but is stolen instantly by scammers.

Scammers are also using AI in order to generate convincing advertisements and to optimise their scamming activities.

Nick Mattison, partner of Mattison, said: ‘Technology has made the job for fraudsters of accessing potential victims through social media easier than ever.

‘This has also made it far harder for regulators and social media platforms to keep these scams in check.

‘Meta alone shut down two million accounts suspected of scam activity in the past year.

‘Crypto fraud is still running at a worryingly high level and there is no certainty that regulation of the sector by the FCA will make a major dent in that level of fraud.’

The FCA flags websites that are acting fraudulently. 

However, these sites spring up constantly, so an absence of an FCA listing shouldn’t be taken as confirmation that an investment is safe.

Nick adds: ‘Considering the profits enjoyed by the crypto industry they should do the right thing and sponsor more advertising and education aimed at warning the public of the risks of crypto fraud.’

Mattison agues that DrinkAware, GambleAware and The Portman Group are all partially funded by the industries in which they operate, and that the crypto industry should take a similar approach to education.

‘One of the reasons why regulators are so wary of cryptocurrencies is that the sector seems to be a magnet for fraud. 

‘Proper investment from the industry to counter the threat of fraud would benefit it as it struggles to gain more political and regulatory support in the UK.’