UK Financial Regulator: Watch Out for Coronavirus Crypto Scams

The United Kingdom’s Financial Conduct Authority (FCA) is asking investors to watch out for coronavirus-related crypto scams.

In a March 11 warning to the public, FCA, the U.K’s top financial regulator, said that scammers may attempt to take advantage of the fast-spiraling global pandemic which has infected some 460 U.K. residents and killed eight.

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

The warning came the same day that the World Health Organization (WHO) declared COVID-19 a global pandemic with more than 120,000 infected so far. At press time the situation was growing more chaotic: Italy, China and New Rochelle, NY are in various states of lockdown; universities are moving their classes online; businesses are going remote; and financial markets are wiping away a decade of steady gains.

Against this, the FCA warned of “too good to be true” investments, particularly those in crypto. It borrowed a familiar refrain from past FCA cryptoasset warnings: “If you decide to invest in something offering a high return or in a cryptoasset, you should be prepared to lose all your money.”

Fraudsters are also trying to exploit the coronavirus pandemic with phony pleas for bitcoin donations to WHO and the Centers for Disease Control and Prevention, according to the City of London’s National Fraud Intelligence Bureau (NFIB). 

The cyber-crime clearinghouse said these crypto-corona scams have largely failed. Of the 21 coronavirus scams that NFIB has reported since February, only a minority actually demanded victims’ bitcoin, and none of those worked. Other, non-crypto coronavirus scams have swindled over £800,000, though.