What are Cryptocurrency Investment scams?
Cryptocurrency is a digital asset that can be traded or exchanged online to buy from people or companies who accept this form of payment.
Cryptocurrency isn’t protected by the UK’s Financial Services Compensation Scheme (FSCS) and most aren’t regulated by the Financial Conduct Authority (FCA). However, it’s attracting more attention as a potentially lucrative investment option due to the fluctuations in value.
Cryptocurrency investments are often made via currency exchange platforms. These are websites where you can buy, sell, or exchange cryptocurrencies for other digital currency or traditional currency like US dollars or Euros. For those that want to trade professionally and have access to trading tools, you will likely need to use an exchange that requires you to verify your ID and open an account or a ‘wallet’.
What to look out for
Criminals are capitalising on the growing attention cryptocurrency is attracting, by offering fake investments that don’t really exist or aren’t worth the money.
Fraudsters promote investment opportunities on social media, fake adverts and endorsements using celebrities or public figures, these adverts link to professional-looking websites to persuade you to invest using cryptocurrencies or traditional currencies.
Criminals manipulate software to distort prices and investment returns and may even defraud people into buying non-existent crypto-assets. The firms operating these scams are usually based outside the UK but will claim to have a UK presence.
Actions you can take
- Before making any investments using cryptocurrency always make sure you understand everything completely and you’re only using money you could afford to lose.
- Double-check the website address (URL) as well as the contact details of a firm. Use resources such as directory enquiries or Companies House to make sure they’re the same.
- You should always have sole control of your cryptocurrency ‘wallet’ and nobody else should have access. If you didn’t set the wallet up yourself or can’t access the money, this is likely to be a scam. You should stop making payments and get in touch with us.