The Financial Conduct Authority (FCA) in the United Kingdom says that cryptocurrency investors have seen losses of up to $34 million because of cryptocurrency and forex scams.
How is such a larger number possible? The FCA suggested that scammers used social media to target and find potential investors, usually through deceptive marketing and advertisements. Pictures and ads of celebrities with fake endorsements were used quite often, the FCA said.
The news isn’t all bad, though. The FCA, with data gathered from Action Fraud, says that investment losses due to scams has actually fallen in the 2018-2019 year — individual losses are now only $18,500, whereas before it was $76,000 on an indiviudal basis. Action Fraud also says that total losses have fallen by $14 million, but obviously $34 million in losses is still a significant chunk.
The FCA is looking at further regulation to help combat these losses. They’re actually considered an outright ban on “high-risk derivative products linked to cryptoassets”, which would help protect individual’s ownership of Bitcoin, Ethereum, Litecoin, and other crypto assets.
While the FCA considers this, Mark Steward, the FCA’s director, cautions investors to do their own research:
“Scammers can be very convincing so always do your own research into any firm you are considering investing with, to make sure that they are the real deal.”