The cryptocurrency industry is expanding by the day with a majority of investors putting their investments in it. However, scammers have also redefined their strategies of luring and manipulating the investors. Apparently, almost every firm seems to be carrying out the financial services activities in the UK. A majority of these firms are neither registered nor authorized.
The UK Financial Conduct Authority has identified one such firm; Fair Oaks Crypto. This is a ‘clone firm’ according to the watchdog, which has sent out a stern warning to consumers. The financial regulator is calling upon all consumers to be cautious of such firms, which are targeting people in the UK.
How is the clone company luring unsuspecting investors?
The truth of the matter is that the crypto industry has become such big news. On the other hand, most of the investors are hardly taking time to evaluate the Crypto firms they engage in leaving them very vulnerable to scammers and con people. Surprisingly, Fair Oaks Crypto seems to be very smart in its trading. According to the FCA, the firm was impersonating FCA-authorized firm, Fair Oaks Capital Limited.
The firm would use the registered details and reference number of the authorized firm without the knowledge of investors. Thus they were convinced that the firm’ services were genuine, stable and secure. This is the second warning that the regulator is sending out in a week. The first one involved a company called Good Crypto, which was reportedly impersonating FCA-authorized firm Arup Corporate Finance.
FCA is working in collaboration with the Bank of England
Victims of such investment scams are likely to lose millions of their funds because the FCA does not regulate Cryptocurrencies. Additionally, the UK’s Financial Services Compensation Scheme is not obligated to protect the investments.
However, together with the Bank of England, the regulator is evaluating various ways, which can help in regulating the cryptocurrency industry. The FCA is also asking investors to be vigilant and report any suspicious firm. They should first confirm the details of the firm with the Financial Services Register
Meanwhile, 24 cryptocurrency businesses are undergoing investigations to determine whether or not they are worth FCA authorization.