A retired financial advisor from East Sussex lost £80,000 (more than $100,000 USD) in a cryptocurrency scam while his father was terminally ill with cancer. He had invested in digital currency through a company claiming to be investment specialists.
According to a report in the Mirror newspaper, Simon Hoadley, 66, was looking for a new way to invest. His father was terminally ill and his wife in a care home. It was also during the pandemic, and with limited options, Hoadley decided to begin investing in cryptocurrencies. For the first year of the pandemic, the crypto markets were on an inexorable rise. Between March 1, 2020, and March 1, 2021, Bitcoin rose about 430%. For many with a bit of optimism, it was hard not to jump in.
Victim Recovered £75,000 of Crypto Investment
The company he interacted with claimed to be investment specialists and initially provided positive returns, which encouraged him to continue investing. The victim began with a modest £250, but eventually had handed over £80,000—or approximately $102,000. However, before long, his “investment” began to decrease, and the firm stopped responding.
Learn how to keep your digital assets safe from scammers: 15 Most Common Crypto Scams To Look Out For
Upon realizing he had been scammed, Mr. Hoadley sought advice from a friend who worked in finance. After his friend advised a trip to the bank, the victim duly made a visit. While at the bank, he noticed that the fraudsters had just withdrawn $5,000 from his account.
Hoadley then engaged fraud specialists CEL Solicitors for assistance, who contacted the Financial Ombudsman Service (FOS) on his behalf. Thanks to their efforts, legal experts successfully recovered over £75,000 from the fraudulent crypto investment vehicle.
FCA Has Received 59% More Enquiries About Crypto Scams Since 2020
The story is particularly worrying as the victim had a background as a financial advisor. There can be little doubt Hoadley was familiar with a wide array of financial crimes. Yet he fell victim to the bad actors.
Despite the FCA warning about the risk of investing in crypto assets, more UK citizens are making the leap than ever before. The UK’s financial regulator has seen a 59% rise in inquiries about cryptocurrency scams since 2020.
Sadly, 79% of consumers who contacted the FCA about potential cryptocurrency scams did so after investing.
This week, the FCA issued a warning about an unregistered crypto asset recovery business, offering to help retrieve stolen crypto. In a statement on its website, the FCA is blunt: “Almost all firms and individuals must be authorized by us if they offer, promote or sell financial products or services in the UK.”
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