The FBI has revealed that over $2 billion was lost to cryptocurrency investment scams in 2022. The result has been that banks worldwide are taking action to protect their customers. NatWest is the latest bank to impose daily and monthly limits on money transfers to cryptocurrency exchanges to protect customers. New FBI statistics reveal that cryptocurrency investment scams are by far the most lucrative scheme deployed by cybercriminals, surpassing business email compromises and ransomware scams.
Banks and law enforcement agencies in the UK are fighting against cryptocurrency investment scams. There is a technique that criminals are using known as “pig butchery” to commit crimes. In general, these scams follow a set formula; first, victims are approached, then trust is built in an online relationship, then the crypto investment scam is introduced, and the scammer steals the funds. FBI warns that criminals encourage victims to invest more money by coaching them through investing and showing them fake profits. It is very common for victims to be told they must pay a fee or taxes when attempting to withdraw their money. Even though victims have paid the imposed fees and taxes, they can still not get their money back.
Several scams are impacting internet users worldwide, resulting in banks starting to take action, including NatWest, which has recently imposed restrictions on cryptocurrency transactions. Following in the footsteps of fellow British lenders Nationwide and HSBC, both of which set similar limits last week, Nationwide is following suit. A statement released yesterday by the bank said it had introduced a daily deposit limit of £1,000 and a payment limit of £5,000 per month to cryptocurrency exchanges to protect customers from losing life-changing amounts of money. In 2022, there will be 284,291 reported cases of online fraud as per the FBI report, making the UK the second most frequent victim of online fraud after the US.
Cryptocurrency wallets should always be kept under your sole control so no one else can access them. According to Stuart Skinner, head of the fraud detection at NatWest, this will likely be a scam if you do not set up the wallet or cannot access the money. There has been a significant increase in the number of scams using cryptocurrency exchanges over the last few months, and we are taking steps to keep our customers safe. The Financial Conduct Authority reported last month that complaints of investment scams have increased by 193% in the past five years, prompting the FCA to create the ScamSmart page with a list of genuine investment opportunities against questionable schemes can be compared to ensure investors are safe.
To trick investors into believing in a false opportunity, scammers are becoming more sophisticated, using different tactics, such as impersonation texts and phone calls, and the increasing cost of living to lure them in. Mark Stewart, FCA’s executive director of enforcement and market oversight, commented on the issue. If you lose money this way, it’s not easy to get it back, so it’s best to be aware of anything that seems too good to be true, as it probably is. Nothing is more encouraging than seeing so many investors spotting the signs of a scam and encouraging others to do the same. The ability to spot scams does not require you to be a Sherlock Holmes type of person.