UK's Legal System Expects A Major Uptick In Crypto Scams After FCA Warning
With the crypto market gaining strong attention worldwide, UK’s legal system is expecting a surge ahead in crypto scams taking place in the country. The head of the Crown Prosecution Service (CPS) recently appraised The Financial Times about this situation.
CPS looks after whether suspects should be charged further and is these cases should be prosecuted in court. Speaking to the publication, Max Hill QC, director of public prosecutions at the CPS said that he expects a surge in the number of cases involving digital currencies. “Cases coming in are in low numbers now but my prediction is they will increase,” he said.
With the unprecedented rally in the crypto market over the last years, the number of scams emerging is also exponentially high. As per Action Fraud data, the total scams related to cryptocurrencies during the last year of 2020 were up 57% to 5,581. The numbers have further extrapolated to this year as well. January 2021 reported double the crypto scams in comparison to last year.
Besides, over the last seven months, there have been over 350 incidents of crypto price manipulation across multiple exchanges. Nearly £267m have been linked to “pump and dump” scams. On the other hand, victims have lost nearly £113m to criminals and cold-callers who promoted crypto scams.
U.K.’s Financial Conduct Authority (FCA) Alerts Investors
Last week, the top regulatory body in the U.K. – Financial Conduct Authority (FCA) – warned investors about a new scamming syndicate targeting investors through a “clone” outfit of a legitimate crypto firm regulated by FCA. As per the FCA blog post, a company under the fake name “Blockchain Recovery Association” is approaching customers under the pretext of the real and legitimate company Gain Capital UK Limited. The FCA stated:
“Fraudsters are using the details of firms we authorise to try to convince people that they work for a genuine, authorised firm. Almost all firms and individuals carrying out financial services activities in the UK have to be authorised or registered by us. [The Blockchain Recovery Association] is not authorised or registered by us but has been targeting people in the UK, claiming to be an authorised firm.”
Crypto and blockchain frauds are on the rise as more players are looking to dabble in this rapidly evolving market. One must do their due diligence before investing.
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