The U.K’s Financial Conduct Authority (FCA) published an official warning on August 17, 2018, in which they mentioned that the British investors are the main targets of the crypto investment scams that are currently in rage.
As warned by the watchdog, the fraudulent accounts use slick websites, celebrity images or the City of London “prestigious” addresses as their smokescreen which entices the probable investors. It was quoted as saying,
“Scam firms can manipulate software to distort prices and investment returns. They may scam people into buying non-existent cryptocurrencies. They are also known to suddenly close consumers’ online accounts and refuse to transfer the funds to them or ask for more money before the funds can be transferred”.
The agencies do not regulate the cryptocurrency but the cryptocurrency derivatives like opinions, CFDs (Contracts for Difference) and futures on their own, as observed by FCA. The investors are advised by FCA to cross-check if the highlighted firm has obtained the authorization to advertise or sell the products. The investors could also go through the list of firms to avoid by the ScamSmart’s warning list. Two alerts have already been issued by the watchdog in the month of August 2018 regarding the “clone firms” of the crypto that claim to have obtained the certification of FCA.
Warning by FCA
FCA notes that anyone that already has been victimized by the scam would most probably be the “follow-up” which “may be completely separate or [otherwise] related to the previous fraud, such as an offer to get your money back or to buy back the investment after you pay a fee.” Earlier, the UK Police had issued a warning to the British citizens over fraudulent crypto investment schemes. Action Fraud national reporting centre had reported crypto scam related losses of over $2.5 million in June and July 2018 alone.