With Bitcoin hitting the mainstream media, more and more people are being exposed to the crypto world. Unfortunately, this is creating the perfect environment for scammers to catch unsuspecting victims and make off with their cash. Earlier this week, the British Financial Conduct Authority (FCA) issued a warning over a scam email that was purportedly promising chances to get rich quick. The scammers used the FCA’s branding and name, in hopes of luring crypto newbies into their scam.
Dominic Thomas – Solomon’s Independent Financial Advisers Founder – was the first person to warn the FCA about the scam. The scammers had sent him the email 5 times last weekend, at which point he informed the FCA via Twitter. The scam email explained that Bitcoin and other distributed ledger technology (DLT) assets are booming in price and are set to rise higher as the year rolls on. The email then encouraged people to act quickly so as to lock in their investments before time runs out. A line from the email reads: “Bitcoin is still a long way off its peak price of $20,000, which it attained in 2017, but some cryptocurrency analysts believe it could hit an even higher value by 2020.”
Scammers Everywhere You Look
Unfortunately for crypto investors who are just starting out, it can be very tough to cut through the scams and make your way to a legitimate crypto trading platform. Scammers are very determined to steal your money, but with a little knowledge and research you can quickly identify the scams. Earlier this year, GlowCryptos was peddling its scam, pretending to be a real crypto investment firm. However, it was riddled with fake documents and red flag phrases. A few months later, the website was shut down and any money that was invested is now missing. In Australia, an elderly couple fell for a scam that saw them lose their entire pension pot. Scammers promised quick and guaranteed returns to help them boost their savings, but scammers ran off with the entire $900,000 kitty.
What Should I Look Out For?
When it comes to spotting crypto scams, it can be very tricky at first. That being said, with a little knowledge and experience, you can quickly filter out the scammers. First of all, check company registration documents to make sure they match the government database. If things don’t match up, chances are it’s a scam. Secondly, watch out for the wording. If a project is promising guaranteed returns, you should run away as fast as possible. Using this phrase is grounds for a huge fine in the investment world. Finally, keep an eye on the spelling and grammar. Genuine crypto projects and exchanges have teams of content writers that won’t make silly mistakes. If the email or website reads badly, then there is a very good chance it’s a scam.
It’s still not clear how many investors fell for the scam that posed as the FCA, but if they sent the email to investors like Thomas, we can live safe in the knowledge that it’s not many. Scammers need to be careful, as victims are starting to fight back. In South Africa, one crypto scammer had his house raided and burnt down by a 1,500 strong mob. Let that be a lesson to scammers out there. If you get caught scamming, it could end with a big fire!