United Kingdom’s Financial Conduct Authority [FCA] has released a report which states that cryptocurrency scams are increasing and its aimed at the UK consumers. The authority also states that, at present, cryptocurrencies are not being regulated in the United Kingdom.
The FCA is the financial authority of the United Kingdom. The authority regulates over 58000 financial institutions and markets in the Kingdom.
Since virtual currencies are not regulated in the UK, matters related to the purchase, transfer, purchase, and sale of digital currencies are outside the jurisdiction of the Financial Conduct Authority. However, there are a few types of cryptocurrencies which could involve regulated investments. This mainly depends on the nature and structure of the cryptocurrency.
The report issued by the FCA stated:
“In recent months, the FCA has received an increasing number of reports about cryptocurrency investment scams, some of which may involve regulated activities, others which don’t, but all of which use similar tactics.”
The authority states that the scammers usually advertise on the social media platform which depicts pictures of famous celebrities or well-renowned people in order to publicize the cryptocurrency investment. Moreover, the advertisement links redirect to a captivating website. After which, the consumers are swayed into investing by using cryptocurrency or fiat currency.
The report added:
“The firms operating the scams are usually based outside of the UK but will claim to have a UK presence, often a prestigious City of London address.”
The Financial Conduct Authority further stated that scammers have the ability to manipulate software in order to influence the prices and investment returns. They can also deceive consumers to buy cryptocurrencies which do not exist in the market.
UK’s FCA reported:
“They are also known to suddenly close consumers’ online accounts and refuse to transfer the funds to them or ask for more money before the funds can be transferred.”
According to the authority’s warning list for advertisements on social media, a cryptocurrency or a cryptocurrency firm would be considered a scam if they offer only a limited period of time to invest, if the risk involved in the investment is less or if the returns promised by the firm is ‘too good to be true’.
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