How Are Increasing Digital Coin Scams Hurting UK Citizens?

The Financial Conduct Authority (FCA) of the United Kingdom came out with a report suggesting increased scams involving cryptocurrency and that they are focused on the country’s citizens. The FCA indicated that digital coin sector is an unregulated one currently in the country. Though FCA is Great Britain’s financial authority, it is struggling to cope up with emerging sector due to lack of authority to monitor it. The unregulated market provides enough opportunity for scammers to dupe genuine investors.

The Purview

The FCA is regulating more than 58,000 financial institutions in the United Kingdom apart from the markets. However, the agency does not have authority to regulate the digital currency sector since it is outside the purview of it. Therefore, it does not have any role in respect of purchase, transfer, and sale of any virtual assets, according to a report in ambcrypto.com. At the same time, there are few digital currencies that came under the purview of the regulator.

However, that is based on structure, as well as, nature of the virtual coin. In its recent report, the FCA indicated that it had received a growing number of reports in respect of scams involving cryptocurrency investment in recent months. While stating that some might have come under the regulated activities purview, there could have been others that did not come under the regulations. However, the report indicated that the tactics are similar and the motive is nothing but dupe investors.

The practice adopted by scammers is that they normally advertise about the crypto investments on the social media platform. Such advertisements depict renowned celebrities’ pictures or famous people. This is to propagate their involvement with the concerned project for which the funds are raised. Additionally, the advertisements offer a link that forwards to a captivating web portal. Following this redirect, the consumers are swayed into investing with the help of either fiat or digital coin.

Further, the FCA report pointed out that those who are operating the scams are normally outside Great Britain. However, such firms claim to have a presence in the country and often pose themselves with an address of a prestigious city of London. Another key point that the report brought out was that scammers are well-equipped to manipulate software so that they could influence not only the prices but also investment returns.

Deceive Consumers

At the same time, scammers could deceive consumers to acquire digital coins that never exist in the market at all. The FCA said, “They are also known to suddenly close consumers’ online accounts and refuse to transfer the funds to them or ask for more money before the funds can be transferred.”