Scams that offer the promise of getting rich quick though crypto-currency investments have tripled in the UK, swindling close to £28 million in the past twelve months, observed the Financial Conduct Authority and Action Fraud, a cyber-crime reporting service run by City of London Police.
The frauds based on bitcoin and other crypto-assets have shot up to 1,834 in the 2018-19 financial year from 530 reports received during the previous 12-month period, according to figures from Action Fraud on reported crime.
The announcement comes weeks after regulatory authorities across the world nabbed the executives of OneCoin, a multi-national crypto-currency Ponzi scheme. According to US prosecutors, the scheme has amassed US$ 4 billion (£3.13 billion) worldwide from victims.
"Fraudsters often use social media to promote their ‘get rich quick’ online trading platforms," said the FCA announcement. "Posts often use fake celebrity endorsements and images of luxury items like expensive watches and cars. These then link to professional-looking websites where consumers are persuaded to invest."
Each victim lost £14,600 on an average, taking up the total amount stolen through bogus foreign exchange and crypto-trading offers to £27.3 million.
Nir Kshetri, professor of management at University of North Carolina, noted earlier that swindlers use a mix of old-fashioned and new-technology tactics to trap prospective victims.
He says that once started, the scheme stays alive through social media and spreads through the personal network of the victims.
"Scammers can be very convincing, so always do your own research into any firm you are considering investing with, to make sure that they are the real deal," said Mark Stewart, executive director of enforcement and market oversight at the FCA. "Before investing online find out how to protect yourself from scams by visiting the ScamSmart website, and if in any doubt - don't invest."
Jake Moore, Security Specialist at ESET, commented in an email to SC Media UK that many "enjoy investing in cryptocurrency" before doing any form of research. "I would avoid any unknown or little reviewed currency or company offering to turn sterling into crypto. Moreover, the current state of crypto won’t be making you any money fast - especially after fees are taken into account," he said.