Crypto-related crimes in the UK are growing by an average of 124% per year as investors looking to cash in on the growing digital currency market increasingly fall victim to scams and fraud, according to new data.
Research from information firm Crypto Head showed that there have been 24,847 reports of crypto crimes since 2016, with 8,801 occurring in 2020 alone, a 24% increase year on year.
Most of these incidents, around 8,131, are related to Bitcoin, while 118 are connected to Ethereum and the remaining 552 linked to other cryptos outside the top two.
The 8,801 figure compares to just 704 cases in 2016, a 1,150% increase in four years, with the research indicating that the number of cases grew “especially quickly” in 2018 with a 355% year-on-year increase in cases. Crypto Head added that the problem is “rapidly increasing” across the US, UK and Australia.
The most common crypto crimes used to extract cash from victims include scam initial coin offerings (ICOs), where scammers lure investors with an ICO for a completely fabricated cryptocurrency, pump and dump schemes where a small group of investors pump money into a low-value coin and convince private investors to follow suit so the initial group can sell their shares for a profit before the price crashes, and standard theft of crypto where hackers steal digital currency from wallets directly or through fake crypto exchanges.
“People should always beware of platforms offering huge returns, if it sounds too good to be true it most likely is. Never send your money or cryptocurrency to a platform you don’t completely trust. If you do some quick research you should be able to gauge online how reputable a company is”, Crypto Head co-founder Adam Morris said in a statement.
“Even if you see big names like Elon Musk supposedly endorsing the investment, do not take this at face value. Scammers are so successful because they use recognisable and trusted names to dupe people into believing it’s a sound investment when really these people have no association to it at all. Make sure you are using an exchange you trust and that doesn’t have insane fees. Also, make sure that you store your cryptocurrencies in an offline wallet such as a hardware wallet. “Not your keys, not your crypto” – if you don’t have custody of your cryptocurrency in your own wallet you are at risk”, he added.