UK Accuses 168 Companies of Crypto Fraud and Forex
2023.02.01 01:32
By Tiffany Smith
Budrigannews.com – An independent analysis reveals that at least 168 companies accused of running fraudulent crypto or foreign exchange (forex) scams are based in the UK.
According to a joint investigation conducted by the Observer and the Bureau of Investigative Journalism and published on January 29, organized crime organizations are using the United Kingdom as their base due to its “lax regulation.”
The number was calculated by comparing lists of suspected shell companies to reports of fraudulent activity on various websites. This revealed that the actual number of U.K.-based crypto or forex companies involved in scams is probably much higher than 168.
About half of the businesses that were found had something to do with so-called “pig-butchering scams.”
An insidious scam known as a “pig butchering scam” involves the con artist convincing the victim to deposit money or cryptocurrency into a trading platform or virtual wallet that the con artist controls after gaining their trust and often involving romance.
After that, the con artist continues to “fatten” the victim and earn their trust before convincing them to transfer a much larger sum and then disappearing with the money.
The report says that people approached victims often through dating websites like Tinder or social media.
Additionally, many of the people surveyed for the report stated that the fact that the businesses were based in the United Kingdom made them appear more trustworthy, and that they would not have fallen for the con if the businesses were located elsewhere.
Since registering a business in the United Kingdom does not require any form of identification and costs as little as 12 British pounds ($14.85), it is simple for fraudulent businesses to register there and gain “sham credibility.”
However, in order to register, businesses are required to provide a U.K. office address, which has resulted in letters being sent to residential addresses from businesses claiming to have an office there.
A resident of the United Kingdom who claimed to have received letters intended for registered shell companies at their address. Source: According to a quote from The Observer, financial crime investigator Graham Barrow, “What’s been happening in the U.K. is unconscionable.” We’ve known for at least 20 years that these scams use UK companies and that we probably provide the most scam companies in the world.
The Financial Conduct Authority of the United Kingdom has made it mandatory for all businesses that engage in the trading of crypto assets to register with it by January 10, 2020, as part of its efforts to crack down on crypto companies operating in the region.
However, as it tries to strike a balance between providing investors with a safe environment and supporting innovation in the industry, the regulator has been extremely stringent in its approvals, allowing many crypto-related businesses to continue operating as unregistered businesses.
