THE States police have issued a warning about cryptocurrency investment fraud after an Islander lost £700,000.
This brings the total financial loss reported this year from cryptocurrency frauds alone to £1.8 million.
Cryptocurrency is a form of currency stored in a digital wallet. The owner of the digital wallet can turn the currency into cash by exchanging it for a government-backed currency, such as sterling or US dollars, which can be transferred to a bank account.
Although the cryptocurrency market represents a legitimate, if volatile, method of investment, scammers can take advantage of its anonymity and decentralised nature.
The States police said: “We need to ensure the public are as aware as they can be about these frauds so they can keep themselves safe and not fall victim to these scams.
“We want to supply as much information as we can about online crypto-frauds, how the fraudsters work and what to look out for if you’re thinking of investing in crypto.”
Cryptocurrency scams work, like most financial scams, through manipulation.
Scammers exploit victims’ trust, lack of knowledge and desire for quick profits – or in some cases all three. Scammers often create professional-looking websites that look legitimate.
These websites often use persuasive language to convince users of their credibility.
In reality, they are packed with malware that can steal personal information or digital currency from the victim outright.
Police outlined some of the key features of crypto scams, which include high-pressure sales tactics, the promise of unrealistic returns and reassurance that there is no trading experience necessary.
Although it is virtually impossible to get any money back after you have fallen victim to crypto-fraud, it is important to act quickly and contact your bank if you think you may have been scammed.
