Cryptocurrency scams are becoming more common with the increased use of online currency. Scammers are broadening their skillset to attack victims in more ways than ever and then disappearing like nothing has happened. This is why it is important for you to learn what to look out for. So, how do you avoid cryptocurrency scams?
Our key tips for avoiding cryptocurrency scams include:
- Be Cautious with Adverts Promising High-Return
- Don’t Commit to an Investment on the Spot
- Check if the Firm is Authorised by the FCA
- Don’t Always Trust a Professional-looking Website
- Seek Advice from a FCA Registered Advisor
- Only Use the Contact Details From the FCA Register
Keep reading to find out more about avoiding cryptocurrency scams including the different types of cryptocurrency scams out there.
Top Tips For Avoiding Cryptocurrency Scams in the UK
The widespread use of cryptocurrency has led to scammers adapting their intelligence and learning new ways to scam people. Take a read below to understand better the top tips for avoiding cryptocurrency scams in the UK.
- Be Cautious with Adverts Promising High-Return
If you are contacted out of the blue about a crypto opportunity via social media message or even targeted by an advert that promises high return, it is highly likely that this is a scam. These types of scams are created to entice people in by promising a high return so don’t let this messaging fool you. Real cryptocurrency opportunities cannot guarantee positive returns. Remember, if it seems too good to be true, it probably is.
- Don’t Commit to an Investment on the Spot
If you are ever being pressured to make an investment quickly then this is something to be suspicious of. We recommend you do your research into your choices and investment firm beforehand and don’t make any pressured decisions.
- Check if the Firm is Authorised
Most cryptocurrency firms are not registered with the Financial Conduct Authority. This means that if something were to go wrong with your investment, you would not be able to use the Financial Ombudsman Service or the Financial Services Compensation Scheme. Our advice is to check if the firm is registered with the FCA beforehand so you can feel safer going into the investment.
- Don’t Always Trust a Professional-looking Website
Just because a firm has a professional-looking website with all the correct information does not mean it is legitimate. Crypto scam fraudsters will go to extreme lengths to scam you out of your money so don’t be fooled by this. Once again, we recommend checking the firm is registered with the FCA first.
- Seek Advice from a FCA Registered Advisor
It can also be a good idea to seek advice from a FCA-registered financial advisor. They will be able to check whether the firm is FCA registered as well as provide legitimate advice based on your finances. If you are willing to part way with such a sum of money for investment, investing in some financial advice should not be an issue.
- Only Use the Contact Details From the FCA Register
A lot of cryptocurrency scam websites will try to mimic legitimate websites. It is important to not use the phone number or email address given on their websites and instead find the correct information from the FCA register.
What are the Different Types of Cryptocurrency Scams?
| Type of Scam | Explanation |
| Celebrity Endorsements | This is one of the most common types of cryptocurrency scams. Scammers create fake testimonials from reputable or recognisable celebrities on their adverts and websites. Between 2020 and 2021, 435 reports were made to Action Fraud about cryptocurrency scams with bogus celebrity endorsements. Often with these scams you are targets via social media or email so be sure to be vigilant with your checks before making an investment. |
| Cryptocurrency Phishing | Phishing is another type of crypto scam that has become popular over the past couple of years. Typically, they involve scammers sending emails with links to malicious websites that request sensitive details such as your cryptocurrency wallets. The issue with this is that unlike passwords, users only get one crypto key. It is advised to never give out your crypto wallet key. |
| Romance Scams | Another common crypto scam involves romance. These types of scams can be a little more long-term due to them involving scammers talking to you online and starting a romantic relationship with you. Once trust is built, they begin to convince you to make cryptocurrency investments with them. |
| Blackmail Scams | Blackmail scamming can also involve cryptocurrency. Scammers threaten their victims by saying they have evidence of inappropriate or adult websites they have been using in order to pressure them into transferring cryptocurrency to them. |
| Rug Pull Scams | Rug pull scams involve scammers pushing a new NFT to get funding. As soon as they get funding from investors, they disappear with the money with no trace. |
In the News: Spike in Cryptocurrency Scams Results in £105,000 Stolen
In May 2024, Action Fraud data revealed that over £105,000 had been stolen from 15 people in North Yorkshire. Each person fell victim to cryptocurrency scams whereby they paid advanced fees in return for valuable returns.
In some cases, victims were retargeted for a second round of fees and then the fraudster disappeared. This has left the victims thousands of pounds out of pocket.
How to Report a Cryptocurrency Scam?
The following advice has been recommended for people moving forward:
- STOP: Take a moment to stop and think before parting with your money or any personal information.
- CHALLENGE: Could it be fake? It’s OK to reject, refuse or ignore any requests. Only criminals will try to rush or panic you.
- PROTECT: Contact your bank immediately if you think you’ve fallen for a scam and report it to Action Fraud.
Stay Vigilant by Following NEBRC’s Advice
NEBRC keeps you up-to-date with any changes in the digital field including the latest cryptocurrency scams. Our Free Core Membership provides resources and guidance on how to keep your business’s sensitive information safe. Contact us today for advice or sign up directly for our Free Core Membership.