UK emerges as a haven for Crypto scammers in this report – CryptoNewsTo

UK emerges as a haven for Crypto scammers in this report

The United Kingdom, known for its historical landmarks, rich cultural heritage, and thriving economy, has a new claim to fame. A joint investigation by the Bureau of Investigative Journalism and the Observer has uncovered that the country has become a hub for crypto and forex scams.

The investigation revealed that at least 168 companies have been accused of running fraudulent crypto or foreign exchange (forex) scams in the UK. The actual number is believed to be much higher.

According to the report, organized crime groups use the UK as a base for their scams due to the country’s “lax regulation.” The investigation found that around half of the companies were linked to so-called “pig-butchering scams.”

This insidious scheme is where the scammer builds trust with the victim, often incorporating romance, before convincing them to deposit money or crypto onto a trading platform or virtual wallet controlled by the scammer. The scammer then continues to “fatten” the victim and build further trust before persuading them to transfer a much more significant sum, only to make off with the funds.

According to the report, victims were often approached on social media or through dating websites such as Tinder. Many of the victims interviewed in the report said that the companies appeared more legitimate because they were based in the UK and would not have fallen for the scam had the companies been located elsewhere.

The report found that registering a company in the UK costs as little as £12 ($14.85) and requires no form of identification, making it easy for fraudulent companies to register there and gain “sham credibility.” Companies must provide a UK office address to register, which has led to some residential addresses being bombarded with letters intended for companies that claim to have an office there.

In response to the growing problem of crypto scams, the UK government has been trying to crack down on crypto companies in the region. The UK Financial Conduct Authority (FCA)
has required that all businesses that carry on crypto asset activity register with it as of January 10, 2020.

However, the regulator has been very stringent with its approvals. Many crypto-related businesses continue to operate as unregistered businesses as it tries to balance providing a safe environment for investors and supporting innovation in the industry.

The findings of the investigation are a wake-up call for the UK government and regulators, highlighting the need for stronger regulations and measures to prevent such scams from thriving in the country.

The UK has long been a hub for financial services and innovation. Still, the growing number of crypto scams is tarnishing its reputation as a safe and reliable destination for investment. The authorities must take swift action to prevent the UK from becoming a hub for crypto fraudsters, protect consumers, and restore trust in the country’s financial system.

In conclusion, the UK’s reputation as a hub for financial services and innovation is being threatened by the increasing number of crypto scams in the country. The findings of the investigation call for stronger regulations and measures to prevent such frauds from flourishing. The UK government and regulators must take swift action to protect consumers and restore trust in the country’s financial system.

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