Cryptocurrency scams lead to increased losses in the UK, new figures reveal

Maria Nikolova

Action Fraud figures given to Which? show in the year to March 19, 2019, a total of £15,248,130 was lost to scams involving Bitcoin.

Independent consumer body Which? has been active in alerting the public about the risks associated with cryptocurrency scams. Today, the organization renews its warnings about the dangers of dodgy cryptocurrency investment firms. 

The swings in the price of cryptos and their aggressive marketing have attracted public attention over the past couple of years. The efforts of scammers tapping into this public interest have also intensified.

Action Fraud figures given exclusively to Which? show in the year to March 19, 2019, more than 1,200 victims collectively lost £15,248,130 to scams involving Bitcoin. This means at least £41,000 on average was lost each day.

The data have been published shortly after the UK Financial Conduct Authority (FCA) posted the findings from two pieces of research looking at UK consumer attitudes to cryptoassets. Those pieces of research, including qualitative interviews with UK consumers and a national survey, were not as alarming as the latest numbers from Action Fraud.

The FCA estimates only 3% of consumers surveyed had ever bought cryptoassets. Of the small sub-sample of consumers who had bought cryptoassets, around half spent under £200 – a large majority of these said they had financed the purchases through their disposable income.

Christopher Woolard, the FCA’s Executive Director of Strategy and Competition commented:

“Whilst the research suggests some harm to individual cryptoasset users, it does not suggest a large impact on wider society.”

Let’s also note that the research material published by the FCA has revealed some worrisome trends. Thus, for instance, findings from the survey show 73% of UK consumers surveyed do not know what a ‘cryptocurrency’ is or are unable to define it. Despite this lack of understanding, the cryptoasset owners interviewed were often looking for ways to ‘get rich quick’, citing friends, acquaintances and social media influencers as key motivations for buying cryptoassets.

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