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Warnings Issued After £346 Million Lost to Blockchain Scams Already in 2024

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Platform Ethereum is the most targeted, and the months of December to February see investors lose the most, according to the Smart Betting Guide.

Bitcoin with dispersion effect. Blockchain fail concept. Physical version of Bitcoin disperses into small pieces in the form of zeros and ones (Binary Number System).

As the world becomes increasingly digital, so is our money, even to the point where currencies are becoming digital. Cryptocurrencies are digital assets that use blockchain technology and encryption to secure transactions.

Investors are attracted to cryptocurrencies because they are decentralised, so they don’t rely on banks, and they have more freedom to diversify their investment portfolio. Crypto’s volatility also gives it the potential to return impressive gains (but also hefty falls).

Bitcoin is probably one of the most well-known cryptocurrencies and its popularity can be attributed to its security measures—transactions are secured using advanced cryptography, which makes it virtually impossible to counterfeit or manipulate the currency.

These impressive security measures, however, do not make crypto investors immune to the tactics of sophisticated and ever-evolving cybercriminals looking to get their hands on your hard-earned money.

Research from the Smart Betting Guide (SBG) has revealed staggering figures relating to the amount lost to crypto and blockchain scams in 2024 already, and experts are warning investors to take heed and take care of their wallets.

The SBG report revealed that almost £350 million has been lost to cryptocurrency and blockchain scams and hacks since the start of 2024. Platform Ethereum has been the worst hit, with over 30 incidents so far, followed by BNB, Arbitrum, Solana, and Bitcoin.

Ethereum is an open-source blockchain platform with its own cryptocurrency, Ether. Since its launch in 2015, it has emerged as one of the most popular crypto platforms.

The report also uncovered that, in the average year, the months of December to February have the highest likelihood of crypto scams taking place, with December being 39% higher than the monthly average.

While platforms like Bitcoin and Ethereum may claim to be more secure than traditional currencies, their convenience, supposed returns, and general popularity make them targets for scammers.

Cybercriminals use sophisticated tricks, such as impersonation, manipulation, and social engineering techniques, to con unsuspecting investors out of thousands of pounds. Some of their tactics include:

  • Posing as a genuine crypto investment firm and convincing victims to transfer their money or crypto wallets.
  • Using the lure of ‘free coins’ or credits to convince victims to put money into a crypto wallet – in the hands of the fraudster.

The UK’s City watchdog, the Financial Conduct Authority (FCA) publishes a warning list of unauthorised firms, so anyone thinking of investing in cryptocurrency should always check that list before parting with any money.

Smart Betting Guide commented on the data, saying that these types of cryptocurrency and blockchain scams:

“not only pose a threat to individual investors but cast a shadow on the broader narrative of cryptocurrency as a revolutionary force in finance.

“They erode trust, stifle innovation, and impede the progress towards a more inclusive and decentralised financial future. Therefore, the task at hand goes beyond personal security; it is a shared responsibility to fortify the foundations upon which the future of finance stands.”

Unfortunately, there is very little protection for cryptocurrency investors in the UK, and the investment platforms used may not always be FCA-regulated. Crypto and blockchain investments are considered very high-risk, speculative investments, and you should therefore be prepared to lose all your money if something goes wrong. If the platform is not FCA-regulated, then you may not be able to get help from the Financial Ombudsman Service (FOS) or the lifeboat Financial Services Compensation Scheme (FSCS) which can pay out compensation if a regulated firm fails.

If you think you have been the victim of a cryptocurrency scam, contact your bank immediately and report it to Action Fraud, the National Fraud and Cyber Crime Reporting Centre. If you have lost money through fraud, that may lead to a criminal investigation by the police.

Like many other financial scams, cryptocurrency scams can leave people feeling tricked and embarrassed. Banks have a duty to apply due diligence when handling your money and must have procedures in place to protect vulnerable customers, highlight unusual or high-value transactions, and block or delay them, where appropriate. In the first instance, your bank should be asked to investigate fraudulent transactions.

If the bank refuses to refund the lost money, a complaint can be made to the Financial Ombudsman Service (FOS). FOS is a government-backed body that resolves disputes between banks and their customers.

There have been several recent FOS decisions supporting customers who have been the victim of push payment scams, including cryptocurrency scams. As the claim is made against the bank, this can help circumvent the anonymity and complexity of the blockchain.

Sarah Spruce, Legal Director and Head of the Cryptocurrency fraud team at TLW Solicitors, commented:

“Cryptocurrency and blockchain investments are, understandably, extremely attractive to investors, but the same thing that attracts them also provides a breeding ground for scammers and fraudsters. It is key to stay vigilant and do your due diligence if you are considering any digital currency investment, as there is still very little protection should you be taken in by a scammer.”

If you have lost out to a crypto scam, we offer a free, no-obligation assessment of your case and will make a decision on whether or not to pursue your claim. If we do take on your case, we operate on a ‘no win, no fee’ basis, meaning you do not pay us anything if your refund claim is unsuccessful.

If you think that you, a friend, or a relative have been the victim of a cryptocurrency or blockchain scam, please contact our specialist team for a confidential, no-obligation conversation.

You can call us on 0800 169 5925, email info@tlwsolicitors.co.uk or complete either the make a claim online or callback forms below.

It is important to get advice as soon as possible as strict time limits can apply.

Minimum case values may apply.

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