The UK’s Financial Conduct Authority (FCA) has issued a warning for cryptocurrency investors in the country and advised them to look out for suspicious crypto projects.
The FCA reminded investors that cryptocurrencies are not regulated in the UK, “The transfer, purchase and sale of cryptocurrencies, including the operation of a cryptocurrency exchange, all fall outside the regulatory remit of the Financial Conduct Authority (FCA).”
The FCA explained that sometimes these scammers use fake celebrity adverts to lure people into their projects. They regularly include a “prestigious City of London address” on their websites. Fraudulent projects often include “professional-looking websites” and are not even based in the UK. Many of these scams copy and paste content from other reliable projects while changing a few minor details.
The FCA reminded investors that majority of the crypto projects haven’t obtained official authorization from the organization. However, some crypto derivatives are regulated, which is why the FCA has created a register on which investors can verify company information.
You should do further research on the product you are considering and the firm you are considering investing with. Check with Companies House to see if the firm is registered as a UK company and for the names of the directors. Search online for the firm name, names of the directors and the product you are considering, to see if others have posted any concerns.
A few days ago, a study published by ZDNet showed that last month, 30% of companies in the UK were victims of cryptojacking. Some crypto criminals trick people into visiting their websites so that they are able to use the processing power of their computers without permission.
Earlier this week, the US Securities and Exchange Commission (SEC) also issued an investor alert. The agency created new search tools and asked people to search a company’s history properly before investing in any project.