New data released by the Financial Conduct Authority (FCA) underlined the scope of the crypto-related scam market.

Reports of possible scams received by the regulator between April and September have amounted to a total of 16,400 – up nearly a third when compared to the same time stretch in 2020.

A further 300 cases suggesting a scam have been opened over a period of six months against crypto-asset businesses missing from the FCA register, alongside 50 live investigations into unauthorised companies.

“Consumers need to have confidence when making investment decisions, and the data we’ve published today shows how prevalent scams can be,” said Sarah Pritchard, Executive Director of Markets at the FCA.

The most frequent reports to the Authority are about crypto-assets scams, as well as boiler room and recovery room scams. Aiming at reducing the number of people affected by fraudulent activity, the FCA has deployed several tools to educate current and future investors.

ScamSmart is a campaign consisting of a website operated by the regulator that features a Warning List which sums up the risks associated with investments, together with the names of companies the FCA has not authorised.

Another campaign, InvestSmart, is aimed specifically at those new to investing, providing them with information on how to make better-informed decisions.

Other measures taken by the FCA include taking a stricter supervision approach, together with being more assertive when enforcing regulations.

For example, the regulator reports that a quarter of firms waiting to be approved for entering the consumer investment market have been stopped. Nine of these companies were suspected of being controlled by individuals who have been previously found responsible for giving unsuitable investor advice.

Companies currently in the authorisation stage need to address any risks of harm so that the FCA can decide if they meet the minimum regulatory standard. Entities that do not comply are removed from the process.

Pritchard concluded: “Before investing, check you know who you are really dealing with, check if they are authorised by the FCA and do your research to understand the risks that might be posed. Find out how to avoid scams on the ScamSmart website and get tips on investing safely on the InvestSmart website.”