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FRAUDSTERS: Warnings of dangers of cryptocurrency

FRAUDSTERS: Warnings of dangers of cryptocurrency

Bitcoin

Trafford residents have reported losing their savings to cryptocurrency fraudsters.

The reports have prompted the council to issue fresh warnings about the dangers of online investment and apparent ‘get rich quick’ schemes.

In recent months the council’s trading standards team said it has been contacted by people who had been tempted by the promise of high returns from schemes such as Bitcoin, but had ended up losing ‘considerable sums’ in the process after falling victim to scammers.

Bitcoin and other cryptocurrencies are digital currencies that only exist virtually, and because their ‘value’ is based on speculation they can be extremely volatile.

This means that even when transactions are not fraudulent, they are still highly risky as an investment.

Sophisticated scammers have managed to swindle entire life savings from some unsuspecting residents through their complicated schemes.

Coun Tom Ross, executive member for finance and governance said: “In recent times there has been a lot of hype around trading in cryptocurrencies, and it’s easy to understand the temptation to make a quick buck. However the reality is that this is a complicated and murky world, which makes it fertile ground for scammers.

“Even if you consider yourself to be financially savvy, it is never a good idea to trust large sums of money to strangers, however convincing or ‘professional’ they may seem. The type of frauds we have seen are sophisticated and could trick anyone. If an investment sounds too good to be true it almost certainly is, and we would urge people to be very careful about parting with savings to ‘invest’ in such schemes.

“It is also worth remembering that the nature of ‘mining’ cryptocurrencies, even when not fraudulent, means they require ever-large amounts of electricity to trade, and from an environmental point of view only add to our carbon footprint, which is something else to consider when choosing where to invest your money.”

When considering making any kind of financial investment, the council has advised that people should always visit the Financial Conduct Authority (FCA) website at www.fca.org.uk to check for fraud alerts and to see whether companies are registered.

The FCA offers some protection to investors but only if companies are registered, so it’s vital that these checks are made before any money is spent.

 

Words: Alice Richardson, Local Democracy Reporter


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