The Financial Conduct Authority (FCA) has warned investors about the risks associated with investing in cryptocurrencies, forex, and shares.
The UK financial watchdog revealed that an average of £29,000 was lost to investment scams in 2018, with some of the most common scams taking place within the cryptocurrency space.
Data from Action Fraud suggests that the total figure collected in scams during 2018 was more than £197 million, with fraudsters employing “increasingly sophisticated” tactics to lure in their victims.
The warning states that 85% of all suspected investment scams in 2018 were facilitated through non-FCA authorised firms, including cryptocurrency outfits.
Press release: FCA warns public of investment scams as over £197 million reported losses in 2018 https://t.co/rxZsrmWOVj
— FCA (@TheFCA) February 6, 2019
The FCA’s executive director of enforcement and market oversight Mark Steward said: “Investment scams are becoming more and more sophisticated and fraudsters are using fake credentials to make themselves look legitimate. The FCA is working harder than ever to help protect the public against this threat. Last year we published over 360 warnings about potentially fraudulent firms. And we want to spread the message so we can all better protect ourselves from investment scams.”
Financial expert Alvin Hall, who is supporting the campaign, produced a video to test how easy it is for investors to fall for online scams.
“Spotting an investment scam is increasingly challenging. To prove that point, my experience was put to the test when I was pitched three investment opportunities. Watch the video to see how I got on,” Hall said.
The warning comes after the FCA’s announcement that it is currently consulting on regulatory frameworks surrounding cryptocurrency, with guides expected to be put in place this summer.