The Financial Conduct Authority (FCA) and the UK cyber crime reporting centre Action Fraud said victims lost over £27m ($34.3m, €30.8m) through cryptoasset and forex investment scams in the 2018/19 financial year.
The duo are warning the public to be wary of bogus online trading platforms, as scam reports more than tripled last year to over 1,800.
Kate Smith, head of pensions at Aegon, said: “It is disappointing to see investment scams continuing to rise with reports of money lost to crypto and forex investment scams tripling over the last financial year.
“This should serve as a warning that fraudsters are still very much at large and using ever-inventive ways to scam people out of their money.
“The FCA is doing some good work to actively raise awareness in this area and help individuals steer clear of bogus investments.
“However, much more is needed to be done to simply keep up as scammers are becoming increasingly sophisticated in their techniques through advancing digital technologies to lure potential investors.”
Celebrity endorsements
The UK regulator said fraudsters often use social media to promote their “get rich quick” online trading platforms.
Posts often use fake celebrity endorsements and images of luxury items like expensive watches and cars.
The images then link to “professional-looking websites” where consumers are persuaded to invest.
Action Fraud reports show that, on average, victims were each scammed out of £14,600 from forex and crypto scams in 2018/19.
Not a get rich quick scheme
Laura Suter, personal finance analyst at investment platform AJ Bell, said: “Cryptocurrency is a scammers’ paradise, as many people ‘investing’ in these assets do little research and are sucked in by the promise of supersized returns in an impossibly short space of time.
“Using social media and the lure of expensive products to draw people in, scammers have made a fortune off their victims.
“Research from the FCA earlier this year found that people went into cryptocurrencies for all the wrong reasons, and getting rich quick was one of the main motivations for buyers – so it’s not surprising that scammers are capitalising on this.
“Anyone handing over their hard-earned cash should make sure they understand what they’re getting into, they’ve checked it’s a legitimate investment, and not rely on hype and excitement from friends or social media.
“Investing isn’t a get rich quick scheme – and anything that uses FOMO (fear of missing out) or requires you to invest before thinking is best to be avoided.”
