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Posted: Sun 28th Jul 2024
North Wales Police and the office of the Police and Crime Commissioner for North Wales are warning residents of the region to be on their guard after seeing a rise in cryptocurrency-related fraud and scams in the area over recent months with members of the public falling victim and losing money to fraudsters.
Cryptocurrency has become increasingly well-known in recent years, for example under the name Bitcoin. It’s a form of digital currency that functions online and doesn’t have the support of a central bank or lender of last resort, such as the Bank of England. People exchange their money with cryptocurrency dealers for virtual tokens that they can spend on goods and services.
While some cryptocurrency investment vehicles are legitimate, some are not and PC Jason Knowles of North Wales Police’s Cyber Crime team believes he has seen approximately £6 million of loss among cases he’s investigated in the three years since joining the team.
According to PC Knowles, investments in cryptocurrency are often made by victims wanting to increase their net worth. They may search for terms like ‘how to invest my money’, leading them to a fake website where they had over their contact information. Usually, within 24 hours or less they are contacted via WhatsApp or more commonly Telegram/Signal encrypted messaging applications to discuss fake investment opportunities. Number spoofing software is often used to trick victims into believing that landline numbers are calling them, when these calls are wholly internet based.
Third party internet-based bank accounts are often set up by victims, which once funded by direct mainstream bank deposits, seamlessly allow the funding of cryptocurrency exchange accounts.
Suspects provide victims with information about what crypto assets to buy and where to send them. Victims are given access to fake investment websites. They are usually bogus and it means the victims have sent their crypto assets to a suspect wallet address, lining the fraudsters’ pockets.
Victims will often receive pressures warning from the suspects to keep on purchasing crypto and sending it to their fake accounts. Victims will receive warnings of imminent losses and potential risk to profit margins. The victim may have opportunities to withdraw some funds, but a peppercorn amount is normally sent by the suspect to prove to the victim that they can withdraw. This is designed to reassure and encourage further investment.
Once realising their mistakes victims are cut off from contact with the suspect, who will often at a later date contact them again under the premise of a recovery agent, who has found their investments stuck in the Blockchain wallet addresses. This does not happen and is a further scam.
PC Jason Knowles, Crypto Lead, Economic Crime Unit, North Wales Police commented: “In recent times, I have seen a rise in cryptocurrency-related fraud in North Wales and I am urging people to be on their guard and keep themselves safe from fraudsters who are after their money and want to take advantage of their interest in investing. I would say to all residents of North Wales, don’t invest what you aren’t willing to lose, do you own research, and double check everything.”
North Wales Police and Crime Commissioner Andy Dunbobbin said: “Making investments in cryptocurrency can seem an interesting and innovative way of making money. But people should be aware that among the legitimate traders, there may be fraudsters waiting to scam you. As PCC for North Wales, a key priority of mine is supporting victims and communities and ensuring they remain free from crime. Given my professional background in IT, I am also conscious of the potential of the online world to harbour dangers for people, especially in terms of financial fraud. I would ask everyone to follow the advice of North Wales Police and to invest safely and confidently.”
Two cases of victims in North Wales
In 2022, a victim, aged 78 reported losses of £346,000 over a year-long cryptocurrency investment scam. The victim wished to invest their savings and make maximum returns. They noticed a Facebook advert featuring a well-known investment and money expert advising that they should buy cryptocurrency, specifically Bitcoin. They provided their contact information and were soon contacted via the suspect using the encrypted messaging applications.
Next, they were encouraged to set up third party internet bank accounts and cryptocurrency exchange accounts, sharing their passport, driving licence and photograph with the suspect who set up the accounts for them. The suspect encouraged the victim to make transfers from their bank to the third-party accounts that they now control. The banks called the victim to query these unusual transactions, however they were already been provided a scripted response by the suspect to reduce the bank’s suspicions. The victim’s funds were then converted to cryptocurrency where they were sent to various wallet addresses. Some money was eventually recovered, but by no means all.
In 2024, a North Wales victim, aged 25, reported a loss of £8,000 after seeing a video of Sir Keir Starmer on their phone’s news feed encouraging them to invest in cryptocurrency. The victim at the time didn’t realise that this was an Artificial Intelligence ‘deep fake’ video. The victim invested their funds after being encouraged to do so via encrypted messaging chats with the suspect, posing as an investment advisor. The victim converted their funds to cryptocurrency and sent them to another account address. Police traced these funds and found that they were sent to a cryptocurrency exchange based in Malta and are now unrecoverable.
For more information on cryptocurrency fraud and how to stay safe, visit: www.northwales.police.uk/advice/advice-and-information/fa/fraud/online-fraud/cyber-crime-fraud/
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