UK Watchdog Warns of Crypto Scams Using 'Prestigious' London Addresses as Smokescreen

The U.K.'s Financial Conduct Authority has said that crypto investment scams are increasingly targeting British investors, in an official warning published August 17.

The watchdog warns that fraudsters often use celebrity images, slick websites or "Prestigious" City of London addresses as a smokescreen through which to lure prospective investors.

"Scam firms can manipulate software to distort prices and investment returns. They may scam people into buying non-existent cryptocurrencies. They are also known to suddenly close consumers' online accounts and refuse to transfer the funds to them or ask for more money before the funds can be transferred."

The FCA notes that cryptocurrencies themselves are not currently regulated by the agency, meaning that many crypto exchanges and other brokers fall beyond its remit.

The agency does however regulate crypto derivatives - including futures, contracts for difference, and options.

In these cases, the FCA advises investors to check whether the firm in question has received the required authorization to sell or advertise these products, or to go through its ScamSmart warning list of firms to avoid.

This month, the agency has already issued two warnings over so-called crypto "Clone firms" falsely claiming to have FCA authorization.

The FCA further advises that anyone who has already invested in scam is likely to be a target for a "Follow-up." This "May be completely separate or [otherwise] related to the previous fraud, such as an offer to get your money back or to buy back the investment after you pay a fee."

Just last week, U.K. police issued their own warning to the British public over fraudulent crypto investment schemes, after statistics from the Action Fraud national reporting center showed that U.K. victims reported crypto-scam related losses of $2.5 million in June and July 2018 alone.