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Banks are starting to take action to protect consumers from cryptocurrency scams. For example, a major bank recently issued a series of urgent warnings to customers after a record number of crypto scams were reported to them.
Pinsent Masons says that if a person has lost money to a crypto scam, a quicker alternative to trying to get that money back may be to pursue civil action rather than just report it to the police and hope that ‘she will have the ability to prioritize your case. Fraud agencies and law enforcement agencies do not have the resources to thoroughly investigate each individual claim, so, depending on the case, civil claims may be a faster alternative to asset recovery.
Jennifer Craven, Senior Partner and Civil Fraud and Asset Recovery Specialist at Pinsent Masons, says:
There seems to be a perception that if a fraudster or online hacker obtains your funds then it is impossible to recover those funds; this is not always the case if you act quickly and seek the right advice.
The increase in crypto fraud may accelerate stricter regulation around cryptocurrency. Recently, the SEC in the United States reported a hawkish new approach to protecting crypto investors. In the UK, the HM Treasury is set to respond to a consultation on crypto regulation shortly, which means new regulations could offer crypto investors more protection in the future.
Jennifer Craven adds:
Crypto scams are on the rise as people try to profit from soaring cryptocurrency prices. Several thousand retail investors have been victims of crime and have been left behind.
The sharp rise in the prices of many crypto-assets over the past year has attracted many new and inexperienced investors to the market. Its unregulated nature makes it a very user-friendly ecosystem for scammers. The technology makes it very easy to impersonate an Elon Musks email address or social media account and take advantage of reckless investors.
The big banks are cautious about crypto transactions to try to prevent fraud of their customers. Some large banks do not allow crypto transactions through their credit cards or allow deposits or withdrawals to crypto exchanges. Banks are really trying to monitor their customers in this area and they are also concerned that if one of their retail customers transfers their account to a crypto-fraudster, the customer could make a claim against them. “
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