By CCN: United Kingdom’s financial regulator, Financial Conduct Authority and the reporting center for scams and cybercrime, Action Fraud, have issued a warning following a surge in online Bitcoin and forex investment scams.
Per the two bodies, Britons lost more than £27 million ($34.2 million) to fraudsters during the 2018/19 period. In 2018, reports on bitcoin and forex investment scams more than tripled to reach over 1,800 cases. The average loss for each victim during the 2018/19 period was £14,600 ($18,532).
The scammers are employing social media platforms to promote these investment schemes. Typically, they are promising excessively high returns over a short period of time according to the two agencies.
Promises of Jet-Set Lifestyle for Bitcoin Investors
To lure unsuspecting victims, the fraudsters post fake testimonials of people living luxuriously after investing in similar schemes. This includes showing images of expensive motor vehicles, jewelry and other luxury items. The fraudsters may also use fake celebrity endorsements.
From the social media posts, the fraudsters then link to professionally-done websites which ask visitors to invest in products purporting to be backed by bitcoin. A victim’s first investment often makes a profit. After their confidence has been boosted, they invest even more money and that is when the fraudsters make a run for it:
Investors will often be led to believe that their first investment has successfully made a profit. The fraudster will then contact the victim to invest more money or introduce friends and family with the false promise of greater profits. However, eventually the returns stop, the customer account is closed and the scammer disappears with no further contact.
Crypto Investment Scam Awareness Campaign
In view of the growing menace, the FCA is planning an awareness campaign on social media regarding the scams. The campaign will involve ‘warning the public to be suspicious of adverts which promise high returns from online trading platforms’. This is according to FCA’s executive director of enforcement and market oversight, Mark Steward.