Cryptocurrency investment scams
UK consumers are being increasingly targeted by cryptocurrency-related investment scams.
Cryptocurrencies (such as Bitcoin or Ether) themselves are not currently regulated in the UK. So the transfer, purchase and sale of cryptocurrencies, including the operation of a cryptocurrency exchange, all fall outside the regulatory.
However, some types of cryptocurrency products may be or may involve regulated investments depending on their nature and how they are structured. For example, firms that sell regulated investments with an underlying cryptocurrency element may need to be authorised to do so.
How cryptocurrency investment scams work
Cryptocurrency fraudsters tend to advertise on social media – often using the images of celebrities or well-known individuals to promote cryptocurrency investments. The ads then link to professional-looking websites. Consumers are then persuaded to make investments with the firm using either cryptocurrencies or traditional currencies.
Scam firms can manipulate software to distort prices and investment returns. They may scam people into buying non-existent cryptocurrencies. 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.
How to protect yourself
Be wary of adverts online and on social media promising high returns on investments in cryptocurrencies or cryptocurrency-related products.
Most firms advertising and selling investments in cryptocurrencies are not authorised by the us. While we don’t regulate cryptocurrencies (such as Bitcoin or Ether) themselves, we do regulate certain cryptocurrency derivatives (such as futures contracts, CFDs and options).
You should do further research on the product you are considering and the firm you are considering investing with.
Always be wary if you are contacted out of the blue, pressured to invest quickly or promised returns that sound too good to be true.
If you have been scammed
You can report the firm or scam to us by filling our report form Because cryptocurrencies themselves are not regulated by the us.