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Reflecting crypto craze, crypto-related scams spiral higher in the U.K.

April 6, 2021, 6:36 PM UTC

As the value of virtual currencies spirals ever higher, so have the scams related to them.

According to new data from the U.K.’s fraud reporting service Action Fraud, scams involving cryptocurrency investment rose 57% across the U.K. in 2020, with a total of 5,581 reports made.

Investors lost a total of £113 million to crypto scammers in 2020, up from £76.6 million the previous year.

Action Fraud regularly warns people to be wary of unsolicited Bitcoin investment opportunities or “money flipping” services across social media and email.

As cryptocurrencies rise sharply in value, many other U.K. bodies are also urging caution.

The Financial Conduct Authority said in January that if consumers are investing because of offers of high returns on crypto assets, they “should be prepared to lose all their money.”

It is a sentiment shared by Christine Lagarde, president of the European Central Bank, who earlier this year called for global regulation of Bitcoin, saying the digital currency had been used for money laundering and other illegal activities.

The head of the Monetary Authority of Singapore meanwhile told lawmakers there that “cryptocurrencies can be highly volatile, as their value is typically not related to any economic fundamentals.”

Within the U.K., getting an insurance payout for cryptocurrency-associated fraud is difficult. The insurance trade organization, Association of British Insurers, recently had to defend its inclusion of ransomware payments in first-party cyber-insurance policies, which are often paid in cryptocurrencies, after it was met with strong backlash. It noted that insurance was “not an alternative” for doing everything possible to first minimize risk.

Separately, to combat the rise in cybercrime, the Crown Prosecution Service is opening a new economic crime court in 2026 in London to bring prosecutions of fraud, economic crime, and cybercrime all under one roof.

Max Hill, the director of public prosecutions at the Crown Prosecution Service, meanwhile, said recently that he expects an increase in crypto-related scams.