According to a recent report from the United Kingdom police unit Action Fraud, the losses to crypto frauds in the country have increased more than 40 percent over the past year. Reportedly, the losses have surpassed £300 million ($370,872,000) for the first time.
As per the Office for National Statistics, cryptocurrency scams are part of a wider “epidemic” of fraud, which accounted for more than 40 percent of all reported crimes in England and Wales last year. The law firm RPC, which collected the data from Action Fraud said that losses from crypto fraud increased 41 percent year on year to £306mn in the 12 months to March 2023 compared with £216.5million ($267,645,960) in the previous year.
In response to this, the law firms said the data provided by the country’s fraud reporting agency, reflects the scale of cybercrime and the high-profile collapse of crypto exchange FTX last year that triggered a wave of losses among retail investors. Reportedly, more than a third of crypto fraud losses for the year, £ 115.7 million ($143,032,968), occurred in November 2022, the month FTX filed for bankruptcy.
These numbers show both the impact of crypto fraud on UK investors and more specifically the colossal impact that the collapse of FTX had on UK retail investors.”
Dan Wyatt, partner at RPC
Simultaneously, Jennifer Craven, a fraud expert at law firm Pinsent Masons, said the figures reflected how widespread crypto crime had become. She added:
[The figures] align with the sharp increase in English High Court actions commenced by victims of crypto fraud who are determined to recover their losses by civil remedial means.
Notably, the British authorities are progressing towards regulating cryptocurrencies as illicit activities have continued to rise. In February, the Treasury set out draft proposals for the regulation of crypto assets, including new requirements on exchanges to ring-fence customers’ money in the event of insolvency.
Simultaneously, Andrew Griffith, finance minister, promised timely and sensible rules for regulating the sector. However, MPs on the House of Commons Treasury select committee said last week that cryptocurrencies should be regulated in a similar way to the gambling sector, given it had “no intrinsic value, huge price volatility, and no discernible social good”.
In the UK government’s national fraud strategy, a blueprint was also released earlier this month for how it will clamp down on financial crime. It pledged to ban cold calls on all financial and investment products. However, many companies said the strategy did not go far enough and called for online platforms, where many scams originate, to face further tougher rules.