Cryptocurrency remains as popular as ever since it first arose in 2009. It's decentralised status initially made it attractive, as it has steadily gained traction. However, it also made it a vehicle for fraud. Cryptocurrency is regarded very differently in countries across the world, from El Salvador, the first country to make Bitcoin legal tender but has now removed the obligation to accept it in compliance with conditions IMF loan to Saudia Arabia, Pakistan and Boliva who prohibited it. Many financial commentators regarded it as the future of money.
Fraudsters suggest to their chosen victims that they will enjoy a far higher return on investment through the schemes that they suggest. Often targeting novice investors with carefully created strategies that circumvent the rules that financial institutions have to abide by in connection with investors that are new to the market. Many novice investors are unaware of the regulations financial institutions are governed by which prevent novice investors from dealing in precarious investments such as contracts for difference (CFD) where only experienced dealers or investors who fully understand the market are permitted to trade. Therefore, inexperienced individuals often become victims of fraudsters and can be persuaded, when their money eventually has gone, that it is due the volatility of the crypto market and the fact that if the market drops extremely swiftly with little or no warning, nearly always resulting in wiping out any gains.
Regulation is shifting to structured frameworks and the UK is one of the first countries to confirm a law that recognises digital assets as personal property which provides greater protection for owners. If you believe you have been defrauded speed is of the essence, act immediately to contact lawyers who specialise in cryptocurrency fraud who can establish the route the fraudsters have taken through Blockchain. Once the cryptocurrency has been traced one of the most effective strategies is imposing a worldwide freezing order, thereby preventing the stolen assets being spirited away.
UK banks are taking proactive steps in preventing and limiting cryptocurrency fraud having previously been considered sluggish on implementing strategies to protect their customers. Currently more that 40% of the attempts to transfer assets to crypto platforms are either completely blocked or delayed. The banks are also imposing strict limits on the amount of crypto-related transactions permitted. Also, the use of credit cards to purchase cryptocurrency has been banned by a number of banks. The new regulatory legal requirement of Failure to Prevent Fraud, together with the regime introduced by the Payment Systems Regulator (PSR) which requires the reimbursement of victims of APP (Authorised Push Payments) fraud introduced in 2024, which ensures that financial institutions will be diligent in imposing strict checks on crypto payments.
After fraud occurs, many banks offer dedicated support to help victims understand what has happened, how to protect their accounts and how to avoid future scams. This can include guidance on securing digital wallets, changing passwords, and freezing further payments or access. Unfortunately, many victims of fraud are completely unaware that their bank account could be subject to fraud. Many financial organisations are deploying advanced analytics as well as Al machine learning to recognise suspicious patterns that may be connected to financial fraud. By noticing a customer's unusual transactions or unexpected high-value transfers that are inconsistent with their usual activities, questions can be asked and a transaction may be able to be obstructed before it completes.
Unfortunately, in some instances, the fraudster is so plausible that the victim is hard to persuade that the fraudster who purports to be assisting them in lucrative investments is not what they appear to be. In one notable example, the bank called a customer into the premises having noticed suspicious transactions and strongly argued that the substantial amounts of money that were being passed to a third party on a daily basis (later discovered to be a fraudster) should cease. Unfortunately, the customer refused to do, only later discovering that the bank was correct, the customer then attempted to sue the bank for failing to prevent him from handing money over to the fraudsters. The dilemma that banks face is balancing fraud prevention with customers' rights to make legitimate payments.
Giambrone and Partners banking and financial fraud department has enjoyed many successes in recovering stolen crypto assets for our clients. Our teams of lawyers in Europe, North Africa, South America, as well as in the far and middle east can act swiftly to protect your crypt assets. Giambrone and Partners applies a number of strategies to expose the fraudsters, such as Norwich Parmacal Orders. Our lawyers were able to reveal and take the fraudsters to task in a ground-breaking case which was the first case in Europe where the Court permitted the service of legal papers as a non-fungible token (NFT) through the blockchain thereby ensuring that the previously anonymous fraudsters could not escape the consequences of their wrongdoing.
We can give our clients, who have suffered the upsetting situation a chance of having their cryptocurrency stolen by fraudsters restored, provided swift action is taken. If you would like to know more about recovering funds lost to cryptocurrency fraud or how to avoid becoming a victim of fraud. For more information, please click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
