Cryptocurrency is one of the hottest investment properties this year, and it’s not hard to see why. It’s exciting, outside the world of mainstream finance, and able to occasionally see huge returns on investment due to the volatility of the market. While it’s important that investment decisions are made based on individual financial circumstances, we can certainly see the appeal of crypto – both for experienced investors and for relative newcomers.
Unfortunately, scammers have also taken note of the cryptocurrency boom, and have been looking for ways to use it to their advantage. The number of cryptocurrency scams going on in the UK at the moment have prompted banks such as NatWest to launch urgent information campaigns. Others, like Starling Bank, are no longer allowing their accounts to be used for purchasing cryptocurrency.
NatWest’s approach has been too use a pop-up screen in their app, warning users about the possibility of cryptocurrency scams. The screen outlines some of the common tactics that scammers use, explaining that “if you’ve been contacted by a trader promising big profits and offering to help you invest in cryptocurrency, this is a scam.” It also outlines some of the things that investors can do to protect themselves – most importantly, maintaining control of your own cryptocurrency wallet by setting it up yourself and ensuring that others don’t have access.
One of the most common tactics involves having a so called ‘trader’ call up the victim and talk them through the process of setting up a digital wallet. They will also use this as an opportunity to install spyware and remote access software onto the victim’s computer. This means that the scammer has access to the wallet, and can withdraw the money for themselves once the victim starts to invest. The best way to avoid this type of scam is to ignore traders who approach you, or who advertise on social media sites with claims that look too good to be true. Instead, do your own research and set up your own digital wallet using a trusted platform such as Coinbase.
Another common tactic used by crypto con artists is the fake giveaway, often accompanied by a fake celebrity endorsement. For instance, a scammer might respond to a tweet from a popular influencer such as Elon Musk with details of a giveaway that claims to be offering free cryptocurrency to those who get involved. The catch? You have to send over some of your existing crypto investment first. Of course, once you send the money the account disappears and you lose everything.
These types of scam certainly aren’t unique to the world of cryptocurrency. People committing financial fraud like to target investors in general, so it’s always very important to make sure you know that an investment opportunity is legitimate before you part with any cash. However, due to the recent surge in crypto purchases, banks have seen that many of their customers are being taken advantage of. If you see a warning from your bank, take a good look and make sure you take their suggestions on board.