London Police Arrest Man Suspected of Operating Cryptocurrency Boiler Room

A man was arrested by City of London Police yesterday on suspicion of running a so-called boiler room scam, selling nonexistent Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term to investors.

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Victims were allegedly sold bitcoins and a ‘fictional cryptocurrency’ by salespeople who cold-called from an address set up in Broad Street in London in an attempt to to make their activities seem legitimate.

The investigation began following reports made to Action Fraud, the national fraud and cyber reporting service. If proven, it will be the latest in a series of cryptocurrency investment scams uncovered in the UK in recent months.

The suspect arrested is believed to have been working as part of a group, specialising in following up on introductions made by cold-callers to finalise the fraudulent deals and secure investor’s money.

The City of London Police said: "The man is thought to be part of a group which allegedly set-up a ‘boiler room’ on Old Broad Street (EC2) which has allegedly been used to persuade people to invest in a cryptocurrency. Victims were cold called by salespeople who allegedly persuaded them to invest in a cryptocurrency which does not exist and is therefore worthless."

So far 9 victims have filed reports, but detectives have contacted many who were not aware they had been victims of fraud. Their combined estimated losses amount to approximately £160,000.

The term 'boiler room' refers to a type of fraud that involves contacting customers unsolicited, often by telephone, offering to sell them exotic financial products. Although the boiler rooms often claim to be authorized service providers with professional websites and forms to fill out, they are in reality swindlers that offer fictitious or worthless investments.