The scams involving currency and digital assets such as Bitcoin has amounted to a whopping £27m in Britan this financial year. The Financial Conduct Authority (FCA) of Britan revealed that these scams have cost an average loss of £14,600 per victim. Also, the number of scams in the UK has increased three folds in the last financial year.
The most common form of scams involved the use of social media to lure gullible people in believing in Ponzi schemes and advertisements which promised to make the victims rich in quick time. The total number of scams reported came to 1,800.
Most of the fraudsters lured the investors on the belief that their first investment has made a profit, prompting them to invest more out of greed, and then the scammer vanishes. The FCA has promised to bring in more transparency and awareness among the common public. They are also going to run an advertising campaign to raise awareness towards the online scams.
Mark Steward, the FCA’s executive director of enforcement and market oversight noted,
“We’re warning the public to be suspicious of adverts which promise high returns from online trading platforms”
As the value and popularity of cryptocurrency rise, the scams and Ponzi schemes associated with it rises too. The main reason for the increase of such scams is a combination of ignorance and greed on customer’s behalf since they are easily manipulated into believing advertisements which are too good to be true.
The decision by FCA to run an advertisement campaign is one of the steps that regulatory bodies and law enforcement agencies need to follow. Apart from that the consumers also need to understand that crypto does promise lucrative returns over time, but if something over the internet promises to make you rich overnight, its definitely a scam.