The FCA has reported a significant rise in checks for cryptocurrency scams, with checks on the regulator’s ScamSmart website rising by 49% in the period between April and September 2021.

Figures published today by the FCA also revealed an increase in reports about possible cryptocurrency scams to its Supervision Hub, which were up 14% on the previous six months.

The FCA revealed that its dedicated cryptoasset team opened over 300 cases relating to potential unregistered cryptoasset businesses in this period, with many of these cases likely to be involved in scams.

During the same six months, the regulator added 172 firms to its Unregistered Cryptoasset Business list and made 10 referrals to the Advertising Standards Authority (ASA) for their consideration.

The FCA’s Cryptoasset Supervision team is responsible for supervising cryptoasset firms’ compliance with the Money Laundering Regulations (MLRs), and for identifying and mitigating risks of potential harm arising in active and registered firms. This includes intervening where firms are at risk of being used as conduits for illegal activity, or where firms pose harm to consumers.

Hargreaves Lansdown senior investment and markets analyst, Susannah Streeter, commented: “Instead of just flashing the warning lights about the number of consumers being lured into risky crypto investments and scams, the financial watchdog is now getting a lot tougher on stopping suspect firms from entering the market.

"A quarter of applications from firms wanting to join the consumer investment market are being stopped by the FCA, up from one in five during the last financial year.

“By showing it’s increasingly on the prowl for scammers and fraudsters, the regulator is clearly hoping to deter more rogue actors from trying to entice vulnerable people into get rich quick schemes.”

She added: “It’s clear that education needs to be sharpened up pretty pronto - with so many vulnerable consumers being lured in, and it’s very welcome that crypto assets will soon fall under the FCA’s watch as part of new legislation.”

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