Crypto fraud has surged during the tough economic climate by almost a third this year alone.
More than 10,000 crypto fraud reports were made this year, a 16 per cent rise on 2021, as thousands of people were scammed.
The value of UK crypto fraud surged by 32 per cent from £171m to £226m this year, according to data from Action Fraud, obtained by law firm Pinsent Masons via a freedom of information request.
Hinesh Shah, a senior associate at the firm who specialises in forensic accounting and financial crime investigations, said “whenever times are tough, fraudsters always seek to prey on less experienced investors by promising huge returns.”
“Given the huge sums which some crypto investors made during the boom, scams involving cryptocurrencies can be especially potent for smaller investors who may be desperate to make a ‘quick buck’.”
“People should always be cautious when they receive an unsolicited suggestion to invest, from sources which they don’t recognise. This is especially true when it comes to cryptocurrencies.”
This comes after the high-profile collapse of Crypto exchange FTX and the resignation of its founder, Sam Bankman-Fried.
The value of cryptocurrencies plummeted between November last year and July of this year, there has been an increase in the number of ‘rug pull scams, according to Pinsent Masons.
This is where crypto developers abandon a project and run off with investors’ cash.
Fraudsters, who have been developing sophisticated ways to evade capture by authorities, have also used fake celebrity endorsements, including from Elon Musk and Richard Branson.
Hinesh Shah added that “given the scale and increasing value of crypto scams, we are likely to see exchanges being pursued through civil courts more frequently. We may even begin to see class actions against crypto exchanges being put together.”