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Banks take action as more than $2bn is lost to crypto investment scams

As the FBI reveals scams are on the rise, banks are taking action to protect customers from fraud.

By Claudia Glover

More than $2bn was lost to cryptocurrency investment scams in 2022, the FBI has revealed. As a result, banks around the world are taking action, and NatWest has become to latest to impose daily and monthly caps on money transferred to cryptocurrency exchanges, in a bid to protect its customers.

NatWest announces caps on crypto transfer to protect customers. (Photo by Alex Yeung/Shutterstock)

Cryptocurrency investment scams have overtaken both business email compromise and ransomware as the most lucrative scheme deployed by cybercriminals, a new FBI report states.

UK banks and FBI fight against cryptocurrency investment scams

Criminals are using a technique known as “pig butchering”. These scams generally follow a set formula; victims are approached, trust is then built in an online relationship, before the crypto investment scam is introduced and funds are stolen.

“Criminals coach victims through the investment process, show them fake profits and encourage them to invest more,” the FBI warns. “When victims attempt to withdraw their money, they are told they need to pay a fee or taxes. Victims are unable to get their money back, even if they pay the imposed fees or taxes.”

With the scams impacting internet users worldwide, banks are starting to take action, with NatWest being the latest to put restrictions on crypto transactions. It follows in the footsteps of fellow UK lenders Nationwide and HSBC, both of which imposed similar restrictions last week.

“A daily limit of £1,000 and a 30-day payment limit of £5,000 to cryptocurrency exchanges is being implemented to help protect customers losing life-changing sums of money,” a statement released yesterday by the bank says.

According to the FBI report, the UK is second only to the US in number of victims of online fraud, with 284,291 being recorded in 2022. 

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“You should always have sole control of your cryptocurrency wallet and nobody else should have access. If you didn’t set the wallet up yourself or can’t access the money then this is likely to be a scam,” said Stuart Skinner, head of fraud detection at NatWest.

“We have seen an increase in the number of scams using cryptocurrency exchanges and we are acting to protect our customers.”

Indeed, the Financial Conduct Authority (FCA) reported last month that complaints of investment scams have risen by 193% in the last five years, triggering it to release a ScamSmart page with a list of genuine investment opportunities to check questionable schemes against, to be on the safe side. 

Scammers are becoming more and more sophisticated, coming up with different tactics, such as impersonation texts or calls, and using the cost-of-living pressure as a way to tempt investors into false opportunities,” said Mark Stewart, executive director of enforcement and market oversight at the FCA.

“Once money has been lost in this way, it’s difficult to get back, so if something seems too good to be true, it probably is. It’s great to see so many investors being able to spot the signs of a scam, and helping others to do the same. You don’t need to be a Sherlock Holmes to spot scams.”

Read more: NFTs worth $100m stolen in the last year

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