<p> In one year, the value of financial losses due to cryptocurrency fraud increased by 32%, according to data from the <a href=”https://www.financemagnates.com/tag/police/” target=”_blank”>UK Police</a> Action Fraud unit seen by the Financial Times. </p><p class=”MsoNormal”>From October 2021 to September 2022, losses from <a href=”https://www.financemagnates.com/tag/cryptocurrency/” target=”_blank”>cryptocurrency </a>fraudsters’ actions amounted to £226 million, which is significantly more than in the same period a year earlier. The number of reported offences alone exceeded 10,000, increasing by 16%. It means that an average investor could lose more than £22,000.</p><p class=”MsoNormal”>According to data from UK Finance, a local financial services trade body, cryptocurrency fraudster activity increased significantly during the Covid-19 pandemic when a sizable portion of daily activity shifted to the Internet. Online fraud increased by 8% to £1.3 billion last year, and <a href=”https://www.financemagnates.com/terms/c/cryptocurrencies/” target=”_blank” id=”b091101e-6e02-4b36-aa0e-7c972dfdd6ed_1″ class=”terms__main-term”>cryptocurrencies</a> are responsible for their growing share.</p><p class=”MsoNormal”>The deepening recession and economic downturn are causing people in financial distress to seek alternative methods of raising money. Unfortunately, their economic desperation is often exploited by fraudsters.</p><p class=”MsoNormal”>”Whenever times are tough, fraudsters always seek to prey on less experienced investors by promising huge returns. Given the huge sums which some crypto investors made during the boom, <a href=”https://www.financemagnates.com/tag/scam/” target=”_blank”>scams </a>involving cryptocurrencies can be especially potent for smaller investors who may be desperate to make a ‘quick buck’,” Hinesh Shah, Pinsent Masons’ forensic account, <a href=”https://www.ft.com/content/c7d2eeae-9a66-4dc4-a10e-11dcd2807600″>told</a> Financial Times.</p><p>FCA Also Sees the Rising Problem</p><p class=”MsoNormal”>Independent data collected by the <a href=”https://www.financemagnates.com/terms/f/financial-conduct-authority-fca/” target=”_blank” id=”4c85a54d-15e0-4e44-a214-8c55f71cb286_1″ class=”terms__secondary-term”>Financial Conduct Authority (FCA</a>), the United Kingdom’s financial market watchdog, <a href=”https://www.financemagnates.com/cryptocurrency/rising-number-of-cryptocurrency-scams-in-the-uk-fca-opened-432-cases/” target=”_blank”>confirms </a>the abovementioned statistics. The institution opened more than 400 regulatory cases of potential cryptocurrency crimes between April 1, 2021 and March 31, 2022.</p><p class=”MsoNormal”>The FCA saw a significant increase in information about potential cryptocurrency crimes, which is up 59% from the previous period. Unfortunately, 79% of consumers contacting the FCA did so after their initial investment. </p><p class=”MsoNormal”>According to the regulator’s fourth Consumer Investments Data Review published last month, cryptos were among the most frequently reported products to ScamSmart. </p>
This article was written by Damian Chmiel at www.financemagnates.com.
