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FCA issues coronavirus cryptocurrency scam warning – FinTech Futures


The UK’s Financial Conduct Authority (FCA) has warned investors to avoid coronavirus-related cryptocurrency schemes that may seem too good to be true.

Crypto scams are on the rise to exploit investors

In a warning published on its website, the regulator says criminals and scammers are trying to take advantage of confusion and market instability in the wake of the virus’ spread across the globe.

“Watch out for scams related to coronavirus (COVID-19),” the FCA writes.

“These scams take many forms and could be about insurance policies, pensions transfers or high-return investment opportunities, including investments in cryptoassets.”

The FCA warns that scammers are sophisticated, opportunistic and willing to try many things to separate investors from their money.

It added that vulnerable people are much more likely to be targeted.

“Beware of investments that appear to be too good be true,” it adds. “If you decide to invest in something offering a high return or in a cryptoasset, you should be prepared to lose all your money.”

Related: The “Coronavirus Budget” and its impact on fintech

The watchdog offers the advice that people should immediately reject any offers coming out of the blue, beware of adverts on social media channels, avoid giving out personal details and keep an eye on its own warning lists.

The City of London’s National Fraud Intelligence Bureau (NFIB) has tracked 21 coronavirus scams since February, with a small number asking victims for bitcoin. It reports that non-crypto schemes have managed to scam around £800,000 so far.

The Securities and Exchange Commission in the US has issued similar advice to citizens, which it published in early February.

“When investing in any company, including companies that claim to focus on coronavirus-related products and services,” it wrote at the time, “carefully research the investment and keep in mind that investment scam artists often exploit the latest crisis to line their own pockets.”

Read more: FCA plans market changes to simplify mortgage switching





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