Scammers Use ‘Lax’ Crypto Regulations in UK for Illicit Motives

An independent study found that at least 168 UK-based businesses are allegedly executing fraudulent crypto or foreign exchange (FX) scams.

An independent study found that at least 168 businesses, which are based in the UK, are allegedly executing fraudulent crypto or foreign exchange (FX) scams.

These organized crime companies are utilizing the UK as their base owing to its “lax regulation,” according to a joint investigation by media organizations the Bureau of Investigative Journalism and the Observer that was released on Jan. 29.

No form of identification is needed to register a corporation in the UK, and the fee is as little as 12 British pounds ($14.85). However, because this requires a UK office address, many residents are receiving a lot of letters at their home address that claim to have an office there. 

Since the figure was determined by looking through lists of alleged shell businesses and comparing them with allegations of fraudulent activity on multiple websites, the true number of UK-based cryptocurrency or FX organizations participating in scams is probably far higher than 168. 

Financial crime investigator Graham Barrow was cited as saying, 

“What’s been happening in the UK is unconscionable.”

Crypto Scammers Find Victims on Social Media Platforms

According to the report, victims were frequently solicited via social media or dating apps like Tinder. The majority of the businesses were connected to purported “pig-butchering scams.” 

A pig-butchering scam is fooling a victim by posing a romantic interest before persuading them to transfer cash or cryptocurrency into a trading account or virtual wallet under the con artist’s control, only to steal the money in the end.

Furthermore, a large number of victims claimed that they trusted the schemes because the companies were located in the United Kingdom.

In the meantime, the National Cyber Crime Unit (NCCU), the UK’s National Crime Agency’s (NCA) cryptocurrency division, has recently created a new office dedicated to combating crimes and criminals involved with cryptocurrencies like Bitcoin (BTC) and others.