Lloyds Bank Warns Over Rising Threat of Crypto Scams

Lloyds Bank has issued a warning over a significant surge in crypto scams, revealing a 23% rise from the previous year.

As per the UK bank’s report, victims are losing an average of $13,130, marking a notable rise from the previous year’s average of $8,570. This spike in scams predominantly impacts individuals aged between 25 and 34.

The modus operandi of these fraudsters typically involves leveraging social media platforms to disseminate deceptive advertisements and direct messages that promise exaggerated returns.

Beyond social media, scammers employ tactics like cloning accounts and websites, posing as legitimate firms with fake endorsements to establish credibility.

Victims often fall prey to these schemes, discovering the deception only after making three payments. On average, it takes about 100 days for victims to report crypto scams.

As reported earlier, Web3 firms lost approximately $890 million to various security breaches, phishing scams, and rug pulls in the third quarter of 2023.

Unregulated Nature of Crypto Attracts Fraudsters

Liz Ziegler, the fraud prevention director at Lloyds Bank, underscored the unregulated nature of the cryptocurrency asset class, citing it as a primary attraction for fraudsters.

Ziegler emphasized the challenge of recovering funds in the event of crypto scams and called for increased responsibility from tech companies in scam prevention, customer protection, and contributing to refunds when their platforms are exploited for fraudulent activities.

Lloyds Bank recommends vigilance against sharing account details or transferring cryptocurrency to unfamiliar wallets.

Instead, the bank advises investors to utilize the Financial Conduct Authority (FCA) website for company verification and opt for card payments to enhance protection.

The FCA mandates clear warnings regarding potential losses in all crypto investments and provides a comprehensive list of authentic firms while issuing alerts about fraudulent entities.