Cryptocurrency Investment Fraud

The States of Jesey Police, Joint Financial Crimes Unit have recently received a report of an online crypto fraud resulting in losses of £700,000 to one victim. 

This is in addition to previous crypto fraud reports, brings the total financial loss reported this year alone to £1.8 million. 

We need to ensure the public are as aware as they can be about these frauds so they can keep themselves safe and not fall victim to these scams. We want to supply as much information as we can about online Crypto frauds, how the fraudsters work, and what to look out for if you’re thinking of investing in Crypto. 

Cryptocurrency is a form of currency stored in a digital wallet.  The owner of the digital wallet can turn the cryptocurrency into cash by transferring it to a bank account. Cryptocurrency, such as bitcoin, is different from cash as it uses blockchain for verification, and does not run through financial institutions, so it is harder to recover from fraud. Bitcoin is a cryptocurrency, while blockchain is a distributed database. 

Cryptocurrency scams are financial frauds that steal from victims using digital currency. These scams take advantage of the anonymity and decentralised nature of cryptocurrencies. These scams work, like most financial scams, through manipulation. Scammers exploit victims’ trust, lack of knowledge, and desire for quick profits—or in some cases all three. 

Scammers create professional-looking websites or platforms that look legitimate at first. These websites often use persuasive language to convince users of their credibility. In reality, they’re packed with malware that can steal personal information or digital currency from the victim outright. 

Typically, you’ll see an advert online, and some will ask for a nominal fee to join an online academy that claims to teach you how to trade commodities, stocks, Forex and digital currencies. The website which will look professional and legitimate, will offer Beginner, Intermediate and Elite Packages.

You would then be contacted by an alleged tutor or advisor who would draw you in very quickly and start corresponding on platforms such as WhatsApp. The fraudster convinces you to invest small amounts initially, promising fake potential growth and show you how to trade on a fake platform. 

The fraudster offers high levels of margin, “special” loan offers, or will offer to match the trade, doubling or tripling your investment. 

You’ll see fake profits and be encouraged by the fraudster to trade more money with the transactions increasing over time. This process can continue over many months, and the fraudsters will place more and more pressure to invest further funds. 

The Red Flags of crypto fraud

  1. Hight pressure sales tactics: you keep getting multiple calls from the company, telling you to act now or you’ll miss out.
  2. No trading experience needed: you’re told not to worry about a lack of trading knowledge. They tell you it’s all done automatically for you, so you don’t need to know anything.
  3. Trojan horse: you’re told to download an app on your computer that actually gives the fraudsters access to your computer (such as AnyDesk).
  4. Too good to be true: you’re shown online account details with unrealistic, rapid growth, to try and incentivise you to invest even more money.
  5. Guarantee of high returns: you’re promised unrealistic returns, such as 300% growth.
  6. Deceptive good looks: just because a website appears slick and professional, doesn’t mean it is legitimate. And just because a celebrity’s photo is on promotional materials, does not mean the famous face actually endorses the company.
  7. Paying more to get less: you’re told you must provide more money before you can make any withdrawals.
  8. Disappearing act: you can’t reach anyone when you make a request to withdraw money.

It’s virtually impossible to get any money back after you have fallen victim to crypto fraud.

What to do if you have been scammed

Falling victim to a cryptocurrency scam can be devastating, but it’s important to act quickly if you’ve made a payment or shared personal details. You need to contact your bank as soon as possible if you have: 

  • Made a payment using a debit or credit card.
  • Made a payment via bank transfer.
  • Shared personal information. 

Scammers often retarget victims of cryptocurrency scams or sell their details. Make sure to change your security details and passwords, especially for online banking, if you think you’ve been caught in a scam. 

You could be targeted again. Fraudsters sometimes re-establish contact with previous victims claiming that they can help them recover lost money, this is just a secondary scam. Hang up on any callers that claim they can get your money back for you. 

There are, however, legitimate ways to invest in Crypto and other investments. If you want to invest, spend time learning about the companies and obtain advice from independent legitimate financial advisors.


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