Crypto Fraud Costs More Than $200 Million This Year, U.K. Police Say

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Fraud linked to cryptocurrencies surged in the first nine months of the year, UK Police said, with victims cheated out of more than 146 million pounds ($200 million) so far.

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There have been 7,118 reports of fraud related to cryptocurrency made to the U.K.’s national reporting center for fraud and cybercrime this year, City of London Police said in an emailed statement. The amount of money allegedly lost in 2021 is already 30% more than all of 2020, it added. More than half of the victims were between 18 and 45 years old.

More on the story here.

Crypto Fraud Is On The Rise

An expert comment from Ilia Kolochenko, Founder of ImmuniWeb, and a member of Europol Data Protection Experts Network:

This seems to be the tip of the iceberg – that is fraud that was actually reported to the police and other competent authorities in the UK.

"Many inexperienced users are intimidated by fraudsters, who artfully deter litigation and prevent victims from filing complaints. For example, victims may first naively invest into a Ponzi scheme and later learn - from the organisers - that the entire venture was unlawful and, unless they take a risk to be prosecuted as co-conspirators, they get 5% of their initial investment as final compensation.

"Moreover, when people lose just a hundred dollars, for instance, in crowd-funding or when buying worthless NFTs, they are reluctant to file a criminal complaint or take legal action if scammers convincingly explain why they cannot get their money back.

"Worse, some of the fraudulent schemes may be legal as a matter of law, for example, when victims are expressly warned about high risks and uncertainty prior to paying the money. Online terms of service and contracts are usually governed by a foreign law thereby making litigation prohibitively expensive and time-consuming. Insurance companies frequently refuse covering cases where the victim may be even at infinitesimal fault. Given that crypto fever is now red-hot, we will probably see a further spike of defrauded victims with no viable means to get their money back. Would-be crypto buyers should carefully scrutinize the contract, ascertain that the seller is solvent and can be brought to court in their home state."

About Ilia Kolochenko

Ilia Kolochenko, Founder, CEO and Chief Architect @ ImmuniWeb Inc.

Ilia Kolochenko is a Swiss application security expert and entrepreneur. He started his career as a penetration tester and has 15 years of experience in security auditing and digital forensics. After serving in Swiss artillery troops in 2007, Ilia founded his first pentesting and cybersecurity consultancy High-Tech Bridge.

In 2014, Frost & Sullivan named the company a leading service provider in the European pentesting market. Later Ilia invented and built the concept of the ImmuniWeb Platform, which combines the strengths of human intelligence with Machine Learning, and is now entirely dedicated to it.

As a Chief Architect at ImmuniWeb, he leads our data scientists, security analysts and software engineers. Ilia holds a bachelor degree in Computer Science and Mathematics from Webster University, a Master of Legal Studies from Washington University in St. Louis and a Master of Science in Criminal Justice (Cybercrime Investigation) from Boston University.

Currently, Ilia is a Doctoral student (Ph.D. in Cybersecurity Leadership) at Capitol Technology University. Ilia Kolochenko is a member of Europol Data Protection Experts Network (EDEN), a Member of GIAC Advisory Board and a Committee Member at Boston University MET CIC (Cybercrime Investigation & Cybersecurity) Center. Ilia is a certified GIAC GLEG professional (Law of Data Security & Investigations) and a Certified Information Privacy Professional (CIPP/US and CIPP/E) by IAPP.

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