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Crimes relating to cryptocurrency are likely to spike in the United Kingdom, and the nation’s Crown Prosecution Service (CPS) is preparing itself to take on a rise in cases.
Speaking with the Financial Times, CPS director of public prosecutions Max Hill QC said cases relating to cryptocurrency were currently coming into his office in low numbers, but that would soon change.
“Whilst schemes using high investment returns have been used for decades, I think we will see increasing numbers,” he said.
According to Yahoo Finance, UK residents lost around £113m last year to people promoting cryptocurrency investment scams.
Action Fraud, the country’s national fraud and cyber crime reporting center, said the number of crypto and forex assets scams were rapidly increasing.
It told Yahoo Finance that reports of scams involving crypto investment had spiked by 57 percent in the 12 months to December 2020, with 5,581 scams total. Meanwhile, scams related to cryptocurrencies this January had doubled year-on-year to 720 in total.
Action Fraud said reports of crypto and forex assets scams tripled from 2018 to 2019, and cost consumers more than £27 million in that period.
Researchers have long been sounding the alarm that cryptocurrency markets are fertile ground for scammers.
Last year, Yahoo Finance reported on research from the University of Technology Sydney and the Stockholm School of Economics in Riga, which found “boiler room-style” scams were rife, generating considerable suspicious trading volume each month.
Boiler room scams are where high-pressure salespeople call lists of potential investors to peddle speculative and sometimes fraudulent securities.
The researchers also found evidence of suspicious trading activity linked to “pump and dump” scams in the order of about £267 million. A pump and dump scam is when an investor or group of investors illegally promote a stock they hold and sell it once the stock price has risen, following the surge in interest.
As a result, the UK’s Financial Conduct Authority (FCA) warned investors to be prepared to lose all their money if they’re investing in cryptocurrency offering high returns, Yahoo Finance reported.
Meanwhile, in the United States, consumers are filing class action lawsuits challenging the way cryptocurrency transactions are made.
In May 2020, a $2.5 million class action settlement was proposed between Chase bank and plaintiffs to resolve claims that the bank unfairly charged cryptocurrency fees.
Do you have any concerns about investing in cryptocurrency? Let us know in the comments!
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