United Kingdom riddled with crypto scams

Last Updated on 50 mins by John Piper

A recent study found that almost 170 UK firms are connected to or suspected to be running fraudulent crypto- or foreign exchange scams.

The Bureau of Investigative Journalism, and the Observer conducted an investigation that found organised crime groups taking advantage of the lack of regulation in the country to establish bases there. The research shows that scammers are likely to be more than 168 companies. Many of these companies are said to have their founders and developers located abroad. However, they use the United Kingdom as their base of operations due to regulations.

Pig-butchering crypto scam

A “pig-butchering scheme” is the main type of scam. To build trust with the victim and convince them to invest or deposit money on a trading platform controlled by him, this is called a “pig-butchering scam”. The scammer will ask for a small amount in Bitcoin ($BTC) or other crypto, then “fatten” the victim with increasing amounts. These scams are often tied to romance and personal trust. The scammers often target victims via social media and dating sites such as Tinder. Many victims claimed that the scammers appeared genuine as they were located in the UK.

It is easy to register a UK company. It has been easy for fraud firms to set up a company and gain a reputation due to the absence of regulation.

Graham Barrow, a financial crime investigator, has described the UK’s situation as “unconscionable,” pointing out that the UK is the largest supplier of scam companies in the world for at least twenty years. Since January 10, 2020, the Financial Conduct Authority has required all crypto-related businesses to register with it. The UK government has tried to tighten regulations in the region. The regulator is strict in its approvals. This allows it to balance the need for investors protection and industry innovation.

Coin Insider’s first article, United Kingdom plagued by crypto scams, appeared first on Coin Insider.

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