A watchdog warns that cryptocurrency scams are on the rise.
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Celebrity images and posh addresses are being used to convince consumers to invest in cryptocurrency scams, a British watchdog says.
The Financial Conduct Authority warned that it’s seen an increasing number of reports about investment scams claiming to offer high returns, noting that cryptocurrencies like Bitcoin and ethereum aren’t regulated in Britain — so those tricked are unlikely to get their money back.
The fraudsters often advertise on social media, using photos of “celebrities or well-known individuals to promote cryptocurrency investments,” according to the FCA statement, which was initially published in June and updated Friday.
“The ads then link to professional-looking websites,” the watchdog says. “Consumers are then persuaded to make investments with the firm using either cryptocurrencies or traditional currencies.”
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It says the groups usually operate outside Britain, but claim to have addresses in locations like the City of London, according to Reuters, which first reported on the statement.
In addition to being wary of social media ads, people should be skeptical if they’re “contacted out of the blue, pressured to invest quickly or promised returns that sound too good to be true.”
Earlier this month, CNET’s Kent German was blackmailed for Bitcoin by a US scammer who sent an old-fashioned letter.
Despite such scams, blockchain — the encryption technology powering Bitcoin — has been adopted by trusted businesses as a tool, and analyst firm Gartner reckons it’ll provide $176 billion in value to businesses by 2025.
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