Cryptocurrency fraud has cost investors £146m since the start of 2021, as crypto scams are expected to become a key focus of the upcoming International Fraud Awareness Week.
According to new data from Action Fraud, 52 per cent of this year’s crypto fraud victims were aged 18-45 years old, while the average loss per victim was just over £20,500.
Action Fraud said that it has received 7,118 reports of cryptocurrency fraud this year, and named the Squid Game token as one of the most high profile scams in recent months.
“These pump and dump schemes are far from unusual, with many crypto fans desperate to catch a ride upwards on a rapid growth trajectory, with the hope of raking in short term profits,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
‘’Crypto scammers are spinning a complex web of deceit and an increasing number of younger people are being lured in with promises of high returns.
“The fear of missing out on the huge gains we’ve seen in crypto assets over the pandemic, means more people are dropping their guard and being seduced with claims the latest coin or tokens is the next big thing.”
Streeter also cited “particularly worrying” reports from the Financial Conduct Authority that 14 per cent of people who have traded crypto assets have got into debt to do so.
“It’s highly likely that some people who have been scammed, may have lost borrowed money, plunging them even deeper into debt,” she added.
“Most firms advertising and selling investments in the crypto Wild West are not regulated.
“If you are tempted to dabble in crypto assets you should only do so with money you are prepared to lose.”
Streeter warned investors to be suspicious of any crypto asset which relies on heavy marketing and promotional offers that could be designed to lure in people fast. Other suspicious ploys include offering unusual ways to invest in assets, for instance, via weekly or monthly investments.
International Fraud Awareness Week begins on Sunday 14 November.