UK investors lost more than £27 million (approximately $32 million) in cryptocurrency and forex-related scams last year, The Financial Conduct Authority (FCA) and Action Fraud reported. The number of reported scams more than tripled from the previous year; over 1,800 were reported in 2018, as opposed to 530 the year before. On average, victims claimed losses of more than £14,600 (approximately $18,500).
“These figures are startling and provide a stark warning that people need to be wary of fake investments on online trading platforms,” said Director of Action Fraud, Pauline Smith. “It’s vital that people carry out the necessary checks to ensure that an investment they’re considering is legitimate.”
Fraudsters are said to be targeting people on social media and luring them in by telling them their initial investment has made a profit. Then, they ask for a bigger investment or referrals. Afterwards, victims see their "returns" stop, accounts are closed, and scammers disappear.
As part of its anti-scam ScamSmart campaign, the FCA will be boosting education on online trading scams and launching a dedicated website with tips on how to avoid them. Mark Steward, the FCA's Executive Director of Enforcement and Market Oversight, also recommends researching companies before investing in them.