Action Fraud registers £2m worth of losses due to cryptocurrency fraud in June and July

UK residents continue to experience the negative effects of cryptocurrency scams. This is reiterated by recent data published by Action Fraud.

Typically, fraudsters are cold calling victims and using social media to promote ‘get rich quick’ investments in mining and trading in cryptocurrencies. Fraudsters will convince victims to sign up to cryptocurrency investment websites and to part with their personal details such as credit card details and driving licences to open a trading account. The victim will then make an initial minimum deposit, after which the fraudster will call them to persuade them to invest again in order to achieve a greater profit.

Between June 1, 2018 and July 31, 2018, 203 reports of fraud involving cryptocurrency were filed with Action Fraud. The total reported loss was £2,059,501.29. In some cases, victims have realised that they have been defrauded, but only after the website has been deactivated and the suspects can no longer be contacted.

In April 2018, Action Fraud alerted the public to fraudulent websites claiming to offer cryptocurrency investments using images and fabricating recommendations from prominent individuals without their consent.

Fighting cryptocurrency fraud now continues on the educational fraud, apparently. In a UK first for police training, the City of London Police’s Economic Crime Academy (ECA) has recently launched a new course on cryptocurrencies. The course “Cryptocurrencies for Investigators” aims to give officers the skills and knowledge to recognize and manage cryptocurrencies in their investigations.

In the meantime, the Financial Conduct Authority (FCA) appears to have been quite indecisive with regard to cryptocurrency regulation. During a recent oral evidence session which was a part of the Treasury Committee’s inquiry into digital currencies, David Geale, Director of Policy at the FCA, was asked whether he sees crypto assets coming within the FCA remit in the future. But Mr Geale tried to avoid giving a definitive reply and just resorted to the future work of a taskforce the FCA has set up to deal with the matter.

David Geale said:

“I would not like to prejudge where the taskforce will land. As I have said, some of these assets already come within our regulatory remit. There is a question of whether they do and, if so, how far and how to expand that. David Raw made a very important point earlier around the international nature of this. It is fine for us to look at this on a domestic basis, but this is global. It is a global internet phenomenon”.

While the regulators are dragging their feet on this issue, the losses are, obviously, growing and the number of victims of such fraud is increasing.