U.K. Financial Regulator warns investors of crypto scams related to coronavirus
Sat, 14 Mar 2020, 08:37 am UTC
The United Kingdom’s Financial Conduct Authority (FCA) issued a public warning on Wednesday to inform investors that scammers might take advantage of COVID-19 which has already infected hundreds of local residents with eight death tolls, Coindesk reported.
“Watch out for scams related to coronavirus (COVID-19),” the FCA wrote. “These scams take many forms and could be about insurance policies, pensions transfers or high-return investment opportunities, including investments in cryptoassets.”
The financial regulator warned that if investments are “too good to be true” then it’s probably a scam. “If you decide to invest in something offering a high return or in a cryptoasset, you should be prepared to lose all your money,” FCA wrote.
Fraudsters use coronavirus to exploit bitcoin donations to the World Health Organization (WHO) ad the Centers for Disease Control and Prevention, according to the City of London’s National Fraud Intelligence Bureau (NFIB). There were already 21 coronavirus scams reported since February and they largely failed. Only a few demanded victims’ bitcoin and none of those worked. Meanwhile, non-crypto coronavirus scams have extorted £800,000 ($1,003,384).
Meanwhile, Better Business Bureau (BBB) revealed in its new report titled “New Risks and Emerging Technologies: 2019 BBB Scam Tracker Risk Report” that crypto scams pose more risk than fraud involving romance and investment. Cryptocurrency scams rank second on the list next to employment scams with BBB risk index of 93.8 and median dollar loss of $3,000 in 2019 from only $900 in 2018.
Crypto scams refer to purchases, trades or storage of digital assets known as cryptocurrencies that involve fraudulent initial coin offerings (ICOs). Crypto scams can also occur on exchange sites that are vulnerable to hackers.
“Unlike money stored in a traditional bank account, which is insured against theft, digital assets such as cryptocurrency cannot be retrieved and transactions cannot be reversed in the case of theft or cyber hacking,” the report added.
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