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Lloyds Bank revealed a rise in cryptocurrency investment scams and reported a 23% increase compared to last year.
According to Lloyds Bank, the average victim in the UK has lost £10,741 in the crypto scam, which was £7,010 in the previous year and higher than losses from any other fraud. Most crypto investment fraud is due to the unlicensed trading platform. This is why crypto trading service providers must comply with AML measures to onboard financial institutes. However, loopholes in the country’s compliance systems assist criminals in manipulating crypto services.
66% of crypto investment originated from social media fake ads and celebrity endorsements. To prevent crypto scams investors should be aware of illegal crypto investing platforms, and financial institutes must conduct risk assessments of crypto trading before onboarding. Carrying out due diligence checks on service providers before letting them invest is essential to combat crypto scams. Crypto investment fraud is a major issue, and banks should take proactive steps to prevent it. They should ensure that their AML systems are robust and that their staff is adequately trained to detect and prevent crypto fraud. Additionally, banks should provide better support to victims of crypto fraud.
Lloyds Bank’s Fraud Prevention director, Liz Ziegler, emphasised the need for caution, mainly when investing in cryptocurrencies, which are still a precarious and largely unregulated financial sector. She highlights the need to verify investment proposals thoroughly and vigilance investors about being duped by social media platforms. The director also stated that crypto scams often involve the illusion of crypto investing platforms or sometimes overtake the legal platform to proceed with scams. Finding these illicit transactions’ money trails is impossible because they use the mixed crypto scheme. She urges investors to verify the crypto investor companies independently and avoid opportunities that seem too good to be real.