Surging Crypto Fraud: UK Reports Over $370 Million in Losses
According to a fraud reporting agency in Britain, over 40% of crypto fraud losses in the U.K. over the past year have increased.
Action Fraud’s data reveals that the losses have exceeded £300 million ($370 million). This surge is believed to be a result of the rise in crypto scams and multiple bankruptcies linked to the FTX incident.
Crypto fraud losses amounted to $370 million in the 12 months leading up to March 2023. A data analysis conducted by the law firm RPC indicates an increase from approximately $250 million in the previous year. Notably, more than one-third of the total losses occurred in November 2022, when the exchange filed for bankruptcy.
The collapse of FTX played a significant role in these losses.
Jennifer Craven, a fraud expert at Pinsent Masons law firm, emphasized that these figures highlight the prevalence of crypto-related crimes.
The figures underscore the urgent need for a standardized global crypto framework for investors. In February, the U.K. Treasury proposed recommendations for new rules concerning crypto assets. Furthermore, the U.K. House of Commons Committee released a report on May 17 suggesting that trading and investing in unbacked crypto assets resembles gambling.
Various traditional financial institutions in the U.K. (TradFi) have cautioned the government about potential risks associated with crypto regulation. These institutions have raised concerns regarding accuracy, taxation, and consumer protection in relation to cryptocurrencies.
They have also warned that regulating cryptocurrencies might create false trust among consumers. This concern arises as the U.K. plans to introduce specific crypto legislation within the next year.
The U.K. government is adopting a cautious approach toward regulating crypto assets. Their aim is to support industrial innovation while ensuring consumer protection from associated risks. Recently, the national fraud strategy of the U.K. government banned cold calling related to financial and investment products.
Meanwhile, the U.S. Attorney’s Office might initiate a civil forfeiture case for cryptocurrency-related fraud incidents. The government expressed its intention to seize the crypto from seven accounts on Binance, which could set a precedent for handling cryptocurrencies in fraud cases.