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The UK hosts at least 168 companies accused of carrying out illicit cryptocurrency or foreign exchange (foreign exchange) fraud, according to independent analysis.
Organized crime groups are using the UK as a base because it is “loosely regulated,” according to a joint investigation by the news agency’s Investigative Journalism Division and The Observer published on 29 January. .
The actual number of UK-based cryptocurrency or forex companies involved in fraud is calculated by reviewing a list of suspect paper companies and cross-referencing with reports of fraudulent activity on various websites. So it could be much more than 168.
About half of the companies found were associated with so-called “pig slaughter scams”.
Pig slaughter scams are insidious schemes where scammers often incorporate romance before building trust with the victim and persuading them to deposit money or crypto into a trading platform or virtual wallet controlled by the scammer.
The scammers then continue to “fatten” the victim, building more trust and persuading them to transfer even more money.
Victims were often contacted through social media and dating sites such as Tinder, according to reports.
In addition, many of the victims interviewed for the report said the company appeared more legitimate because it was based in the UK, and said they would not have been scammed had the company been located elsewhere. increase.
Registering a company in the UK costs only £12 ($14.85) and no ID is required, making it easy for rogue companies to register in the UK and gain ‘fake trust’.
Businesses must provide a UK office address to register, but this has led to some residential addresses being inundated with letters addressed to companies claiming to have offices in the UK.
“What is happening in the UK is not conscientious,” said financial crimes investigator Graham Barrow. “We’ve known for at least 20 years that UK companies are being used for these scams and are perhaps the largest provider of fraud companies in the world.”
Related: UK-origin stablecoin integrated into 18,000 ATMs nationwide
The UK government is cracking down on cryptocurrency companies in the region, and the UK Financial Conduct Authority will require all companies with cryptocurrency activities to register from 10 January 2020.
Regulators are very strict on approvals, but many crypto-related businesses remain unregistered businesses as they try to find a balance between providing a safe environment for investors and supporting innovation in the industry. continues to operate as
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