Crimes related to cryptocurrencies have increased 12-fold in the past four years, from 704 reported incidents in 2016 to almost 9,000 in 2020.
That's according to new findings by Crypto Head, which obtained the information via a Freedom of Information (FOI) request sent to the UK's national reporting centre for fraud and cyber crime, Action Fraud.
The reported crimes include incidents of cryptocurrency fund theft, pump and dump schemes that aim to lure private investors into investing in low-value coin, as well as initial coin offering (ICO) scams, where investors are scammed into investing in a completely fabricated cryptocurrency.
The biggest ICO scam to date is that of Bitconnect, an open source cryptocurrency that guaranteed investors 40% returns but turned out to be a Ponzi scheme that cost its investors $2.6 billion.
Crypto Head found that there had been 24,847 reports of crypto crimes in the UK since 2016, increasing by 124% every year on average. The biggest increase was observed in 2018, when reported crimes increased by 355% year-on-year. Since, the number of reports increased 6% in 2019 and 24% last year, with 94.5% of incidents relating to Bitcoin.
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“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,” he said, adding that people should “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. 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,” said Morris.
Crypto Head also conducted similar research in the US and Australia, with the countries having reported 110,990 and 23,576 incidents, respectively.
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Having only graduated from City University in 2019, Sabina has already demonstrated her abilities as a keen writer and effective journalist. Currently a content writer for Drapers, Sabina spent a number of years writing for ITPro, specialising in networking and telecommunications, as well as charting the efforts of technology companies to improve their inclusion and diversity strategies, a topic close to her heart.
Sabina has also held a number of editorial roles at Harper's Bazaar, Cube Collective, and HighClouds.