skip to Main Content
Get your free newsletter: Actionable insight each morning for self-directed investors. 

Crypto crime has grown exponentially since 2016, which saw just 704 cases reported to Action Fraud compared to 8,801 in 2020. This is a 1,150% increase in just four years.

In total there have been 24,847 cases of crypto crime reported in the UK which grew especially quickly until 2018 where it peaked with a 355% increase in cases. It has begun to pick up again as 2020 saw 24% more reports than the previous year.

On average each year the number of cases reported grows by 124%.

Bitcoin has the most crime reports of any currency totalling 23,492 reports since 2016, however this can be expected as it is also the most dominant in the market. The USA has more crimes than the UK and Australia with a total of 110,990 and 23,576 reported cases respectively.

There are various ways people can be duped out of their investment and coins. The most common of those include:

Crypto Scam Initial Coin Offering (ICO)

Scammers will often lure investors with an ICO for a completely fabricated cryptocurrency, often taking information from legitimate coin sites to appear more convincing. As new currencies enter the market frequently, this can seem like an attractive investment to ‘get in quick’, only to find it was all fake.

This was seen in cases such as Bitconnect and Pincoin where $2.6 billion and $660 million was stolen from investors.

Crypto Pump and Dump Schemes

A small group of investors will pump money into a low value coin and convince private investors to follow suit so the initial group can sell their shares for a profit. The price then drops back down to its true value and leaves other investors out of pocket.

Crypto Theft

Although crypto wallets can be very well protected, they are not completely secure. Hackers can get in to directly steal your funds and they can also set up phony crypto exchanges. The most secure wallet is an offline one with a unique password that you change regularly.

People should always 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.

“Even if you see big names like Elon Musk supposedly endorsing the investment, do not take this at face value,” says Adam Morris, co-founder of Crypto Head. “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. 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.”

Crypto crime rates in the UK

YearCryptocurrencyBitcoinEthereumTotal Reported CrimesYear-on-year increase
2016146891704
2017431,407321,482111%
20182286,440716,739355%
20192656,825317,1216%
20205528,1311188,80124%
Total1,10223,49225324,847

Related

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Graeme Andrew

Graeme Coles-Andrew

Graeme is Head of Technology at the Armchair Trader. He has worked in online financial investment publishing since 2000 as a website developer, advertising operations manager, data scientist and all-round go-to guy for online technical solutions.

Stocks in Focus

Here are some of the smaller companies we are following most closely. They all represent significant growth stories in our view. Our in-depth reports go into more detail on why we like them.

Comments

Subscribe for more stories like this, 8am weekdays - for free!


Get your free daily newsletter: 

Thanks to our Partners

Our partners are established, regulated businesses and we are grateful for their support.

Pepperstone
FP Markets
IG
Spreadex
WisdomTree
ActivTrades
Back To Top