The Financial Conduct Authority (FCA) has warned that cryptocurrency scams are using images of celebrities and London addresses from wealthy areas to trick investors into investing with dodgy companies.
The warning from the British regulator was first made earlier this year in June, but it has reposted the warning on its website again today. This is because the watchdog has seen a rising number of investment scam reports, where companies are claiming to offer high returns.
As cryptocurrencies aren’t regulated, investors need to be extra careful when investing with brokers or on exchanges. This is because should things go awry, it is outside of the FCA’s scope to help, and the likelihood of getting your money back is slim.
According to the statement from the FCA: “UK consumers are being increasingly targeted by cryptocurrency-related investment scams. Cryptocurrency fraudsters tend to advertise on social media, often using the images of celebrities or well-known individuals to promote cryptocurrency investments. The firms operating the scams are usually based outside of the UK but will claim to have a UK presence, often a prestigious City of London address.”
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Typically, the ads on social media will link to websites for investments. These could use cryptocurrencies or even tradition cash/fiat currencies.
Further warnings from the FCA
Along with the cautionary note on cryptocurrency scams, the UK regulator also added three firms to its warning list today. The three companies are 10 Trading which is owned and operated by BINEXT Solutions SRL, SMO Investments Limited t/a The Loan Doctor and 365 Markets.
According to the three separate warnings all three firms are offering their products and services within the UK and targeting residents. This is despite not being authorized by the regulator, making such activities illegal.
Investors should exercise caution when dealing with the above firms. Before engaging with online brokers or trading platforms, it is wise to check your local regulator to see if they have been flagged for suspicious activity and check to validate that they are authorized and licensed.