The United Kingdom has seen a rise in the number of cryptocurrency-related scams. Data obtained by UK’s fraud reporting service Action Fraud show that the scam reportings were up 57% in 2020 compared to the year before, with a total of 5,581 reports made.
Surge In Crypto Value Sees Scams Rise
As cryptocurrencies continue to grow, there has been a corresponding increase in crypto scams.
According to Action Fraud, investors lost a total of £113 million to crypto scammers in 2020, up from £76.6 million the previous year.
The agency advised people to be more careful and wary of unsolicited Bitcoin investment opportunities or “money flipping” services across social media and email.
As reported by the Financial Times, banking industry trade group UK Finance stated last month that in 2020, wire transfers in which customers inadvertently sent money to criminals committing fraud totaled almost £500,000.
The report also gave one reason for the increase in cryptocurrency-related crimes: the surge in the prices of major cryptocurrencies such as Bitcoin.
Due to the surge in institutional demand for Bitcoin, the total value of cryptocurrencies recently surpassed $2 trillion, as seen on CoinGecko. Bitcoin is reportedly now worth more than $1 trillion after its price more than doubled in 2021.
Bitcoin was followed closely with the five next biggest coins: Ether, Binance Coin, Polkadot, Tether, and Cardano. They have a combined value of about $422 billion.
This comes as no surprise as Bitcoin has been on the lips of several institutional investors dabbling in crypto as a way of hedging against fiat inflation. From Tesla Inc to Mastercard and PayPal, different companies have taken steps to embrace Bitcoin.
Nothing Unsual About Crypto Scams
Despite the already major increase in crypto-related scams, the United Kingdom Crown Protection Service (CPS) still expects to see more of the scams in the coming days.
Max Hill, the director of public prosecutions at CPS, predicts that crypto scammers who use high investment returns to scam people would increase.
Meanwhile, the Financial Conduct Authority (FCA) has previously warned consumers to beware of firms promising high returns on crypto assets because these investments involve taking very high risks.
The FCA stated that consumers willing to invest in these products should be prepared to lose all their money. The agency has not been such a big fan of cryptocurrencies as it has severally laid concerns about price volatility, consumer protection, product complexities, and the risks involved.