March 31, 2023


Your trusted source for crypto news and insights

Crypto scammers abuse ‘lax’ UK company laws to fool victims: Report

2 min read

A recent investigation revealed that the United Kingdom is a hub for companies involved in fraudulent crypto or forex scams, with at least 168 such companies being identified

A joint investigation by media corporations the Bureau of Investigative Journalism and the Observer printed Jan. 29 discovered that the lax regulation in the country is said to be the reason behind organized crime groups using it as their base.

The actual number of such companies could be much higher than the 168 recorded, as the research was based on lists of suspected shell companies and reports of fraudulent activities on different websites.

Half of the identified companies were linked to pig-butchering scams , a type of scam where the attacker builds trust with the victim through various means, including romance, and convinces them to deposit money or crypto into a platform or wallet controlled by the attacker, ultimately making off with the funds.

Many of the victims, who were often approached through social media or dating websites, said they would not have fallen for the scam if the companies had not been based in the U.K. due to its easy company registration process, which requires no form of identification and costs as little as $14.85..

Some companies use residential addresses as their U.K. office addresses for registration, leading to an influx of letters meant for these companies being delivered to those homes.

Letters meant for shell companies registered at a U.K. resident’s address were reported by the resident, according to The Observer.

Financial crime investigator Graham Barrow stated, “The events in the U.K. are unacceptable. We’ve known for at least 20 years that U.K. companies are utilized in scams and the U.K. is likely the largest supplier of fraudulent companies globally.”

The U.K. Financial Conduct Authority mandated that all firms engaged in crypto asset activity must register with it as of January 10, 2020, as part of the U.K. government’s efforts to regulate crypto companies in the region.

The regulator has been strict with its approvals, but many  crypto businesses remain unregistered as it strives to maintain a balance between safeguarding investors and fostering innovation in the industry.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *