The number of cryptocurrency investigations being carried out by the UK’s financial watchdog has risen sharply. The Financial Conduct Authority (FCA) has confirmed that it currently has a total of 87 cryptocurrency cases on the go.
This compares to just 50 last year, giving an increase of 74%. The FCA also revealed that consumers have lost an estimated of £74 million or more in a mixture of cryptocurrencies scams and foreign exchange swindles.
More Details on the Cryptocurrency Investigations
These 87 enquiries being carried out by the FCA include cryptocurrency investigations at many different stages of the process. Therefore, it covers advanced, large-scale studies as well as smaller enquiries and those that have just started.
These details came from Pinsent Masons. This international law firm obtained the numbers from the FCA. David Heffron is a partner at Pinsent Masons, and he said that the figures show how the authority is taking more of a hands-on approach to the market.
He also pointed out that these numbers are a good sign for “cryptocurrency businesses acting lawfully”. This is because it shows that the “bad actors” in the industry are getting discovered and pushed out.
What Kinds of Scams Are Being Investigated?
It is estimated that the number of crypto scams has increased since Bitcoin rise strongly earlier in the year. This sparked renewed interest in the idea of making money quickly from digital currencies.
One of the issues with scams of this nature is that there are very easy to set up. They could simply involve fake social media accounts. They will then sometimes invent a supposed endorsement from a celebrity and post image of luxury goods.
Anyone who is tempted and follows the links will find themselves on a fake website that looks real. If they invest their money, the firm will simply disappear with their cash. This is why it is important to only use reputable exchanges and brokers, such as eToro and Coinbase.
What Should You Do?
The FCA earlier confirmed that the most likely type of crypto customer is a middle to high-income male between the ages of 20 and 44. Yet, anyone of any age can fall for a cryptocurrency scam. They received over 1,800 reports of scams in the last financial year.
It is important to always do your research on both the token and the exchange that you plan to use. The number of cryptocurrency investigations should begin to fall if everyone takes their time to fully research their options. After that, if anything doesn’t look right you can report it to the FCA.