A report suggests companies can register in the U.K. very easily, making them appear more credible to potential scam victims.
The UK is home to at least 168 companies accused of conducting crypto or foreign exchange (forex) fraud schemes, according to an independent investigation.
A joint investigation by the media agency, Bureau of Investigative Journalism and The Observer was released on January 1. 29 found that organized crime groups use the UK as a base because of its “constitutional structure”.
The actual number of UK crypto or forex companies involved in scams is likely to be more than 168, as the number was calculated by reviewing a list of suspicious companies and turning them into reports The trick works on different websites.
About half of the transactions found are linked to so-called “pork scams”.
A pork scam is a fraudulent scheme in which a fraudster builds trust with the victim – often involving romance – before convincing them to invest money or crypto in an exchange or a small bag. The scammer then proceeds to ‘fat’ the victim and build trust before getting them to hand over a large amount of money, only to take the money and walk away.
According to the report, these victims are approached on social media or through dating sites such as Tinder. In addition, many of those interviewed in the report said that the companies seem legitimate because they are based in the UK, saying that they would not have fallen for this scam if the company those are elsewhere.
Registering a business in the UK costs just 12 pounds ($14.85) and does not require any kind of identification, making it easy for fraudulent businesses to register there and gain “false confidence”.
However, companies are required to provide a UK company address to register, which has resulted in some mailing addresses and companies claiming to have offices there. “What is happening in the UK is unacceptable,” said financial crime investigator Graham Barrow. “We have known for at least 20 years that UK companies have been using these scams and that we are probably the biggest supplier of scams in the world.”
The UK government has tried to crack down on the crypto industry in the region, with the UK’s financial regulator requiring all companies trading crypto assets to register with it by January 10, 2020.
However, the regulator has been tight-lipped in its approval, and many crypto-related businesses continue to operate as unregistered businesses as it tries to balance the center to provide a safe place for investors and support innovation in the industry.
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