Blockchain Cryptocurrency Cybersecurity Europe Fintech Insights Intelligence

Over £113million Lost to Crypto Scams in 2020: Numbers in 2021 Expected To Be Much Higher

A poll by European law firm Fieldfisher revealed over 93% of businesses are uncertain or have no idea what to do if they fall victim to cyber fraud.

Lack of preparedness for responding to cyber fraud incidents is giving fraudsters greater leeway to hide stolen assets, reducing the chances of recovery.

According to the poll, only around 7% of respondents were confident they would know what to do in the event of a cyber fraud incident. Of those who responded, just over 67% said they had “some idea”, while nearly 27% said they would have “no idea” how to react (responses were rounded to the nearest whole %).

Cyber fraud covers a multitude of activities, from simple push-payment frauds involving the transfer of cash between accounts under false pretences, to highly sophisticated schemes using cutting-edge technologies, digital currencies and complex multi-jurisdictional networks to steal and hide assets.

While many frauds involve hard currency and traditional bank accounts, which are relatively easy to trace in terms of ownership and jurisdiction, fraudsters are increasingly targeting crypto assets, which despite being fairly simple to track through the blockchain, are harder to pin to people and places.

Knowing who to call and being able to move quickly are key to recovering stolen assets, as the England and Wales civil courts have the power to issue worldwide and proprietary freezing orders and disclosure orders – even if the location of the assets and the identity of the perpetrators is unknown – to halt the dissipation of assets.

Incidents of fraud are on the rise, as fraudsters tap into increasingly deep pools of cash and cryptocurrencies.

More than £200 billion has been put into cash savings accounts since the Covid-19 lockdowns began in March 2020, according to the latest Bank of England data, which was published on 29 July 2021 and goes up to 30 June 2021.

According to a freedom of information request submitted by Investors Chronicle in March to the soon to be revamped fraud reporting service, Action Fraud, British investors lost £113million to crypto scammers last year, up from £77million in 2019 – a figure that Fieldfisher fraud specialists expect to be surpassed this year, driven by soaring cryptocurrency values.

Commenting on the recent increase in cyber-fraud incidents and Fieldfisher’s poll findings, corporate crime partner Tony Lewis said:

“Incidents of all the types of fraud we deal with, but particularly bank and cryptocurrency fraud, have increased noticeably in the past year.

“Cash held in bank accounts is an obvious target, with victims ranging from high net worth individuals holding millions in offshore accounts, to pensioners with modest savings held in high street bank accounts.

“In terms of cryptocurrency, like any relatively new asset class with the potential for very high returns, there is always a risk fraudsters will try to take advantage of it. Amateur investors are among the main targets for fraudsters, while ransomware attacks against companies, to be paid in crypto, are also becoming a frequent occurrence.

“Victims of fraud often consider the criminal route of redress first which can be an effective way of bringing the perpetrators to justice.

“However, pursuing a civil action against fraudsters may be a faster and more effective way of recovering stolen property, which in most cases is the victim’s primary priority.”

Author

  • Francis is a junior journalist with a BA in Classical Civilization, he has a specialist interest in North and South America.

Related posts

Saving Habits are Starting Young According to Pocket Money App

Gina Clarke

Behind the Idea: Boku

Polly Jean Harrison

Dosh and Button Expand Relationship to Provide Enhanced Omnichannel Rewards and Tap Betterment as First Partner

Adam Snyder