Scam warning: ‘Best way for victims to try recover funds’ | Personal Finance | Finance

Cryptocurrency is often seen as a volatile and unsafe investing option due to the sheer potential for scams and fraud involving it. However, knowing what red flags to look out for, and steps to take if one believes they have become a victim, can make all the difference. Partner and Head of Investment Mis-selling and Fraud team at Keller Lenkner UK, Mark Kenkre, shared exclusively with Express.co.uk how investors can spot a scam and avoid it before it’s too late.

It is estimated that Britons lost more than £150million to cryptocurrency fraudsters in 2021, with 18 to 25-year-olds being hardest hit.

This statistic, while concerning, is not a surprise as the youngest generations have taken to the likes of cryptocurrency much quicker than their older counterparts, with nearly a third of the UK’s cryptocurrency owners being under the age of 30.

Mr Kenkre noted that the boom in interest for cryptocurrency investment has also attracted “sophisticated scammers” that investors should be wary of.

He shared some general advice for crypto enthusiasts: “There are many new, evolving risks in the crypto world. To minimize them, stick with beginner friendly crypto exchanges like Coinbase or Gemini. For beginner crypto investors, it may be best to start with the two most popular cryptos – Bitcoin and Ethereum – which have a longer track record than other altcoins.

“The best way for victims of a scam to try to recover funds that are lost is by reporting any suspected fraud to the police and to your bank – the best starting point to see if recovery of your lost funds is possible.”

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He continued: “Beyond applying common sense and never parting with your money in a hurry to anyone offering quick or high returns, always protect your private financial information including details about your crypto wallet. Never believe any guarantee that you will make money, achieve big payouts or get free money. Be skeptical, be sensitive, and be wise!”

Mr Kenkre shared “the most common types of scams” ​​as well as “key warning signs” investors should keep in mind.

Payment types

It should be a big red flag for investors if an online retailer or individual says they can only accept cryptocurrency as payment.

Mr Kenkre shared: “It’s probably a scam. No credible organization demands cryptocurrency as the only means of payment.”

WHICH MISS:

They use the likes of social media and emails to get the victim to share their private information, security codes or trick them into sending their crypto coins into a compromised digital wallet.

Additionally, scammers may pose as businesspeople or influencers that “lure potential targets by promising to match or multiply the cryptocurrency sent to them”, this is also known as a giveaway scam.

Blackmail

These scams can often be the most emotionally damaging as it doesn’t use the usual facade that most scams do.

Mr Kenkre explained: “Blackmail or extortion scams claim to have a record of adult websites or other illicit web pages that you have visited and threaten to expose you unless you share private keys or send cryptocurrency to the scammer. Any attempt at criminal extortion should be reported to the Police.”