Recent statistics show that foreign currency and cryptocurrency fraud in the UK are increasing rapidly. Syedur Rahman of business crime solicitors Rahman Ravelli says the onus is on investors to do their homework and tread carefully.

Reports of investment fraud in the UK linked to trading in cryptocurrency and foreign currency have more than trebled in the past 12 months.

That is according to the Financial Conduct Authority (FCA) and Action Fraud, which is the UK's reporting centre for fraud and cybercrime. They have stated that investors in online trading schemes lost a total of £27 million in the past 12 months, with an average individual loss of £14,600. The past year saw 1,834 reports of suspected investment fraud made, compared with 530 for the previous 12-month period.

The FCA has said that most fraudulent schemes are promoted on social media platforms, with those who run such schemes often telling investors they have made an initial profit. But this is nothing more than a tactic to convince people to hand over more money.

Director of Action Fraud, Pauline Smith, said that the latest statistics were startling. She called them a stark warning about the dangers of fake investments on online trading platforms and proof that people need to be careful before investing in any schemes.

Such advice should certainly be heeded by any would-be investor. When it comes to cryptocurrency, the instability and the lack of regulation in the market mean there is always a significant risk. Whatever the investment, it is vitally important that those looking to put money in know exactly what they are investing in.

Investors should be looking at the white paper, which outlines exactly what it is that is being offered. The performance of any initial coin offerings has to be scrutinised carefully – and nobody should be taken in by exaggerated claims about any currency. The old saying of "If it looks too good to be true, it probably is'' certainly applies.

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