Lloyds Bank, one of the largest UK banks, has reported that the number of scams related to cryptocurrencies had increased by 23% in 2018, according to a recent research. The bank stated that customers had lost an astonishing £2.5 million to such frauds. The research was conducted by the chief economist Andrew Bailey, who based his results on the bank’s fraud account.
The most common type of fraud is fake investment opportunities, where customers are encouraged to “invest” in new currencies or technologies that the fraudsters claim will guarantee high returns in a short period of time. However, the returns never materialise and customers are left with significant financial losses.
As cryptocurrencies become more widespread and accepted, the risk of falling prey to this type of fraud is likely to persist. The onus is on customers to protect themselves by analysing the legitimacy of cryptocurrency ventures, researching the business and engaging with trusted advisors before investing in cryptocurrencies.