Bitcoin

Due to Bitcoin Scams, British Lost Nearly £27 million in 1 Year

Quite common and frequent these days, bitcoin scams and frauds are on the rise, especially in the UK. As revealed by the country’s watchdog,  Financial Conduct Authority (FCA), crime involving crypto- and foreign-exchange has increased by 74% as compared to last year. FCA stated that while they received about 50 inquiries, there were 87 inquiries this year.

According to FCA, people living in the UK subjected to different kinds of bitcoin and other crypto scams have lost roughly £27 million. On the evident increase in the number of investigations led by FCA, David Heffron, a partner at a London-based global law firm Pinsent Masons, said:

It reflects the FCA’s increasingly hands-on and no-nonsense approach to enforcing the law in the cryptocurrency market. For cryptocurrency businesses acting lawfully, these statistics will be encouraging — they want bad actors pushed out.

Bad actors in the space are on the rise. In the recent, scammers based in the UK went as far as representing Her Majesty Queen Elizabeth II to unlawfully collect as much bitcoin from the locals as possible. At that time, scammers posing as a representative of the queen asked locals to save the country’s economy which was at great risk due to lack of bilateral agreement with the European Union (EU).

In addition to that, scammers explained that  82% of the total amount i.e. £19 billion was arranged successfully but for the remaining 18%, contributions from locals were needed. Furthermore, scammers asking locals to contribute by sending bitcoin to a specific also wallet address also announced a membership of Royal Warrant Holders Association for all contributors and 30% interest for the next 3 months on the contributions made.

Although the techniques and methodologies used by scammers are getting advanced from time to time, adversaries of bitcoin and other cryptocurrencies blame cryptos for not providing security. Therefore, clarifying the truthful reality, Liz Louw who is Content Strategist, Bitstocks Media told BlockPublisher:

The idea that Bitcoin lets you bypass the authorities reveals an ironic misunderstanding about the immutable and transparent nature of the Bitcoin ledger.

Louw added:

“The Bitcoin blockchain ledger is *a permanent record *of its entire transaction history, noting senders and receivers (by wallet addresses) of each transaction, the timestamp of the transaction, transaction values, and
other bits of data. As there is a distributed network of nodes each with an identical copy of the ledger, an attempt to tamper with the record will be impossible to hide. Should one of the nodes submit a new transaction to the
network while sneaking in an altered historical record, other nodes will immediately notice the discrepancy and consider the tampered version invalid. While transaction ID’s (wallet addresses) make the system pseudonymous, the only thing standing between uncovering the identity of transaction actors is to match the wallet with an owner.”

Bad actors all over the world are trying various ways to capitalize on crypto assets belonging to someone else. A few months ago, scammers in the US found luck in looting about $1.2 million worth cryptocurrencies. They used sextortion and bomb threat scams to threat people and then bargain their way out by asking cryptocurrencies from people.

While scams took over millions of dollars worth cryptocurrencies from British, crypto hacks have also robbed crypto users and exchanges several times. Apart from them, security breaches resulting in nothing but loss of cryptocurrencies have also damaged the image of bitcoin and altcoins. Let’s see if some permanent solution could be developed to prevent all types of fraudulent practices from taking place in the space.

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Fatir Malik

Electrical engineer by profession, turned into blockchain developer. Fatir contributes regularly with his insights about latest developments in fintech sector. Contact the editor at editor.opinions@blockpublisher.com

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