The U.K. Financial Conduct Authority (FCA) made an official statement warning the investors of high risks associated with investing in cryptocurrencies. The warning is based on the statistics shown by the U.K. fraud reporting service called Action Fraud. According to their research, in 2018 investors lost £197 million. On average people lost £29,000 because of the investment scams.

As the times go on, investment scams become more and more masterful at finding new victims and convincing people to give their money. Back in the days, the method of cold calling was efficient enough because people trusted unknown “companies” and were ready to invest some money into something quite obscure. Now, these days are gone, and scammers find new approaches to empty your wallet. Bitcoin and Ethereum are in the risk zone now. The investigation reveals that the most popular channels for scamming are email, fake websites, and big social media platforms, say Instagram or Facebook.

Statistics show that people become more and more vigilant when it comes to interacting with scammers. Many people know how to tell a scammer from a legit businessperson. Old tricks are not working. There is an FCA Warning list exists. This list helps to identify scammers and learn useful info about the investments (the list contains the info on the investments to avoid). Allegedly, in 2018 54% of those who took a look at this list acknowledged that they have already been contacted by scammers. In 2017 only 45% of respondents had interaction with the scammers from the list.

FCA claims that the biggest number of reports of scam is related to bonds and shares, forex, and cryptocurrencies. A financial expert and an active long-time investor Alvin Hall in association with the FCA created the list of six signs for scam identification. This tool should help everyone easily avoid losses of time and money. You can see it below:

1. Unexpected Contact. It’s better not to react on investment offers channeled directly via email service, social media account, or in person. Such contacts may be seen as suspicious.

2. Time pressure. Scammers usually force their victims to invest as soon as possible. They picture the situation the way that people might feel that they might lose something if they don’t invest money right now. That’s not typical behavior for a legit business person.

3. Social proof. Fraudsters can boast rave reviews on their products. These reviews can be fake. If this info can’t be confirmed in the trusted sources of information it’s better to skip the offer.

4. Unrealistic returns. If you feel that the offered returns are too generous to be true, then probably you are not mistaking.

5. False authority. Some scammers refer to regulations, some literature or website in order to pose themselves as a trustful party. It’s better to check these links, or in the trusted sources. Probably these claims are just empty words.

6. Flattery. Most probably scammers will try to seduce you using flattery and friendliness. Don’t let such ton distract you from the subject of conversation. If you interact with a stranger, you shouldn’t trust him/her only because this person seems to be nice to you.

Conclusion

While some people hope that cryptocurrencies will improve economic relations soon, others try to exploit the hype surrounding cryptocurrencies and internet technology in order to steal money. Each disruptive innovation attracts people and each new thing that attracts people is also attractive for scammers, too. It’s understood. But the statistics provided by Action Fraud makes me think that not everyone understands things clearly.