Crypto Scams Rampant in the UK Amidst COVID-19

Crypto Scams Rampant in the UK Amidst COVID-19

by March 30, 2020
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Fraudsters are taking advantage of the coronavirus crisis in the UK. These scammers, claiming to be affiliated with either the World Health Organisation (WHO) or the U.S. Centers for Disease Control (CDC), purportedly sent malicious text messages to residents of Pembrokeshire, Manchester, and Norfolk. In the messages, the scammers purported to have a list of COVID-positive residents, where the victim can only gain access if they either: 1) go to a credential-stealing page; or 2) make a donation in the form of a payment into a Bitcoin account.

London’s National Fraud Intelligence Bureau (NFIB) elaborates that these scammers are asking for donations that can largely benefit the WHO and the CDC. Fortunately, Yahoo Finance reports that these scams have largely been unsuccessful — at least for the time being.

The UK had been warned

Back in early March, the Financial Conduct Authority (FCA) had warned UK residents about scammers potentially using the coronavirus pandemic as a cover for their illicit acts. The warning was released on March 11, the same day the WHO declared a global COVID-19 pandemic.

“Watch out for scams related to coronavirus (COVID-19),” the FCA declared. “These scams take many forms and could be about insurance policies, pensions transfers or high-return investment opportunities, including investments in cryptoassets.”

At that time, the UK had recorded 460 coronavirus cases, with 8 fatalities. Since then, cases in the UK have climbed drastically. By March 28, the number of infections in the UK had breached 17,000, with at least 1,019 killed by the virus. In response, the Prime Minister Boris Johnson, who is also infected by COVID-19, has urged UK residents to stay at home to curb the spread of the virus. Only time will tell, though, whether or not the UK’s response to COVID-19 will work favourably.

Crypto’s get-rich-quick enticement

Back in February, Bitcoin’s price surged back to over $10,000 (CHf9,513), a more than 200% increase from Bitcoin’s 10-year low price of $3,196 (CHf3,040) in December 2018. This surge was fuelled by investors seeking safe havens given the encompassing economic implications of the coronavirus. That value has since gone down, whilst COVID-19 cases worldwide have spiked.

As of this writing Bitcoin’s price has slid to $6,163 (CHf5,863). But the price of Bitcoin and other cryptocurrencies could surge back up again very quickly, especially if the global economy remains in flux. In line with this, prominent trading platform Plus500 emphasises that cryptocurrencies are extremely volatile, with experts putting Bitcoin’s latest bull run as just as strong as the late-2017 bull run, when it was valued at just under $20,000 (CHf19,025). This volatility can spook some investors, but is enticing to scammers looking to make a quick profit.

With the pandemic still ongoing and its aftermath likely to be full of uncertainty, both investors and scammers are potentially looking at massive payouts. This means crypto scams might increase in the coming days, with more unscrupulous individuals taking advantage of these trying times.

Crypto-scams are nothing new

Scams involving digital currencies are nothing new. In Q1 of 2019 alone, in fact, exit scams robbed cryptocurrency users worldwide of nearly $195 million (CHf186 million). Notably, the QuadrigaCX scam misappropriated over $130 million (CHF124 million) in digital currencies, while the Coinbin scam cost users around $26 million (CHf25 million).

At the moment, it is unlikely that crypto-corona scams will strip crypto holders of millions. That said, fraudsters are bound to keep on trying, especially in these times when people around the world are most vulnerable.

Featured image credit: André François McKenzie via Unsplash

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