The World of digital currencies seems to be gaining a veneer of legitimacy with the recent announcement by Facebook that they are going to be launching their own digital currency called the “Libra”. Not only will it have the credibility of Facebook but the association behind it has big names such as Paypal, Visa, Ebay and Uber also involved.
That all sounds great, unfortunately the fraudsters have gone into a feeding frenzy and have launched multiple fake Libra sites, posts on social media etc. Given that the currency is not scheduled to launch until next year it’s easy to be very definitive on this. The scams use the official logo, pictures of Mark Zuckerberg and look very real, but they’re not! In 2017 80% of all Initial Coin Offerings were scams and their total losses were over a £1 billion. In 2018 the FCA dealt with a 200% increase in cryptocurrency fraud cases.
THE FINANCIAL CONDUCT AUTHORITY ONLY REGULATE SOME CRYPTOCURRENCY DERIVATIVES AND NONE OF THE CURRENCIES THEMSELVES. THAT MEANS THAT MOST INVESTORS WILL NOT HAVE ACCESS TO THE FINANCIAL SERVICES COMPENSATION SCHEME.
Tips and Advice
- Libra does not exist – yet!
- Research, research, research – check up on any firm you are thinking about using, use the FCA’s registry and their warning list as a starting point
- Don’t be taken in by an impressive looking website/address – with the average loss on these crimes of over £10,000 the fraudsters have plenty of money to invest in a good-looking website
- If you must buy some digital currency – research the “wallet” provider that will hold them, a simple Google search of “best digital wallet” and looking for a reputable source such as a major newspaper article is a much better approach than reacting to an advert/cold call
- Avoid cold calls – cold calls are not the way reputable companies market their investment products, so don’t buy from a cold call!
- Read More – Read the FCA website on crypto currencies to better understand the risks
- Still Unsure? – Join Reassura 0800 888 6400 and one of our fraud advisor’s will help you to stay safe
- To report a fraud – and receive a police crime reference number call Action Fraud on 0300 123 2040 or use their online fraud reporting tool
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