The U.K. government has announced plans to crack down on crypto and insurance fraud, costing the country $9 billion annually.
The government has banned cold calling for crypto investments and insurance.
Prime Minister Vows to Crack Down on Fraud
The United Kingdom government will employ 400 specialist staff and use new technology to detect the impersonation of legitimate U.K. phone numbers. As part of its crypto fraud crackdown, the government will also review methods criminals use to mass-text U.K. citizens.
The National Crime Agency says that fraudsters rely heavily on information from data breaches. They use social engineering to steal personal data for laundering funds through the bank accounts of sometimes unwitting U.K. citizens.
They also increasingly use online channels, with many investment frauds committed outside the U.K. Fraud schemes target vulnerable individuals such as the elderly.
Prime Minister Rishi Sunak vowed in a recent statement:
“We will take the fight to these fraudsters wherever they they try to hide.”
The NCA hopes the introduction of new polymer banknotes will reduce fraud involving counterfeit physical fiat.
In related crypto news, the Bank for International Settlements and the Bank of England recently piloted a real-time gross settlement system synchronizing ledgers used in asset transfers.
The system is set to go live next year and could lay the groundwork for a real-time settlement system using a wholesale digital pound.
The U.K. Financial Services Markets Bill undergoing parliamentary review includes stablecoin regulation proposals and regulatory sandboxes for testing distributed ledger technology.
Crypto Investment Scams Rocket
Investment scams constituted the highest losses of fraud reported to the FBI’s Internet Crimes Complaint Center last year. Losses from crypto pig-butchering scams rose 183% from 2021, resulting in victims losing $2.57 billion.
Fraudsters often target their victims through dating applications, text messages, and allegedly misdialed phone numbers. They groom victims for months before asking them to invest in cryptocurrency.
Co-conspirators pose as investment advisers or customer service representatives on bogus websites. Scammers also control smart contracts available through crypto wallet software.
Once the fraudster gains the victim’s trust, they request large deposits, which victims are later unable to withdraw. The criminals request additional money to release funds until they have depleted the victim’s savings.
The Internal Revenue Service in the U.S. uses forensic software to trace illicit crypto fund flows. New behavioral analysis tools in development will assist law enforcement in recognizing suspicious on-chain behavior.
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