What can you do to try and help avoid a crypto fraud or scam?

Increased reports of crypto fraud and scams

Reports of fraud and scams involving cryptocurrencies are on the increase. A recent article by Cyber reports how around £1 million worth of cryptocurrency scams are being reported by Santander UK customers each month. This article quoted Thomas Cattee, Solicitor in Gherson’s white-collar crime, investigations and regulatory department.

This follows on from a recent article by Action Fraud entitled “Cryptocurrency fraud leads to millions in losses so far this year”. Indeed, in this article Action Fraud reported that they have received 7,000 reports of cryptocurrency fraud with the average victim losing just over £20,500.

So, what can individuals do to try and avoid potential frauds and scams?

Be careful online and specifically on social media

Indeed, the FCA recently stated an aim to target advice at individuals online and through social media. This comes at a time when people are spending increasing time online (partly due to the recent pandemic).

Do not be distracted by “celebrity endorsements” or price turbulence

Crypto prices appear to be increasing again, which some will argue correlates to increased reporting of crypto fraud. However, instead, focus on making sure to:

Heed Action Fraud’s advice and check the FCA’s Register

In order to identify and avoid such scams, individuals would be well advised to heed Action Fraud advice and also check the FCA’s register. More specifically:

• Don’t assume it’s real – professional-looking websites, adverts or social media posts don’t always mean that an investment opportunity is genuine. Criminals can use the names of well-known brands or individuals to make their scams appear legitimate.
• Stay in control – avoid uninvited investment offers, whether made on social media or over the phone. If you’re thinking about making an investment, thoroughly research the company first and consider getting independent advice.
• Make the right checks – Firms providing regulated financial services must be authorised by the FCA. You can check whether they are authorised on the FCA’s Register. Use the contact details on the Register, not the details the firm gives you, to avoid ‘clones’.

Finally, further follow Action Fraud’s advice, including to be wary of online and social media adverts promising high returns.

And finally, follow old wisdoms

Especially the old adage that if something sounds too good to be true, then it probably is!

If you feel you have been the victim of a crypto fraud and/or scam then Gherson’s white-collar crime and regulatory team can offer advice on any attempted steps to obtain redress and also any associated cryptoasset tracing.

Further, Gherson’s civil litigation team are able to offer support with any civil measures. Finally, the team are able to work alongside expert crypto-tracing companies.

please do not hesitate to contact us for advice, send us an e-mail, or alternatively, follow us on Twitter, Facebook, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

©Gherson 2021