5AMLD to Fight Crypto Frauds

UK Looses Heavily to the Increasing Cryptocurrency Scams

According to a new action fraud figure, the UK has suffered heavy losses to crypto scams. By March 19, 2019, a total of £15,248,130 was lost to scams involving Bitcoin.

The UK based independent consumer body which has been actively alerting the public about the various risks involved with cryptocurrencies and ever-increasing rate of cryptocurrency fraud has renewed its newsletter.

The updated list has mentioned that with fluctuation in prices of cryptocurrencies in the last couple of years have drawn great public interest towards space, and at the same time, the efforts of scammers tapping into the interest of public have also intensified.

The latest report by Action Fraud suggests that the number of frauds and scams related to cryptocurrencies has intensified. A total of 1200 cases of fraud has been detected, which has collectively cost the community a whopping £15,248,130 from these victims. This brings down the value at £41,000 on an average daily.

The Given Data is Conflicting with the Financial Conduct Authority (FCA) Research

UK Financial Conduct Authority (FCA) has posted other findings from the two research reports focused on the UK consumers attitude towards crypto assets. and after analyzing that report, FCA believes that the Action Fraud figures are alarming and quite different from what they have discovered.

The FCA estimates only 3% of the surveyed consumers have ever bought any crypto assets. Of the small sub-sample surveyed by FCA has admitted having bought crypto assets but not more than £200. And the majority of them reaffirmed that they had financed the purchases through their disposable income.

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

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

The findings of the FCA research is quite contradictory to the figure given by Action Fraud, and it also revealed some worrisome trends.

Of the total sample size, 73% of surveyed consumers have no idea what cryptocurrencies are, neither they were able to define it. However, despite the lack of knowledge most of the crypto asset owners had one thing in common, they wanted to get rich faster.

They cited the influence of their relatives, friends, acquaintances and social media influencers as their primary motivators for investing in crypto assets. This actually makes the data presented by independent body Action fraud understandable, given the lack of knowledge, people are more vulnerable to the scams as they don’t have the knowledge or understanding to differentiate between genuine and fraudulent offerings.