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The increasing frauds, crimes in cryptocurrencies since 2018 has given a setback to the authorities and has asked the traders to keep a check on the individual companies one is dealing with. As per the police report, there were almost 393 fraud cases reported last year which is increasing day by day.
Crimes, frauds, cheating related to Cryptocurrencies crimes have increased since 2018. As per the reports filed by the police, there are 393 reports of cheating, fraud and other crimes related to investments in cryptocurrencies that were made last year. This number rose thrice in 2019 when 125 reports were made. It was a massive jump from the 15 reports in 2018.
As per the police filing, $29 million was lost between 2018 and 2020. Anthony Lim, Director of the Non-Profit Centre for Strategic cyberspace and International studies believes that cryptocurrencies are popular for illicit use as they are unregulated currencies where there are no government holdings.
Falling in trap
According to Lim, the perpetrators of the scam see the potential victims’ need for cash or inability to resist for making quick money. People who fall prey to the victims’ card is because of their lack of experience or knowledge about the crypto market. People do not know how cryptocurrencies work. They indulge with the company or an individual without checking the background and hence fall into their trap, leading to loss of their hard-earned money.
Hence, it is essential to have due diligence in understanding the crypto market, how it works, knowing the company or the person offering the deal, and running checks on the seller’s legitimacy with the Monetary Authority of Singapore (MAS).
Tharman Shanmugaratnam, Senior Minister and Coordinating Minister for Social Policies emphasised in a written reply to Parliament that MAS has been cautioning people of investing in cryptocurrencies as it is risky and not suitable for retail investors.
Increasing crimes due to fraudulent schemes
The crimes and frauds related to cryptocurrencies have been on rising since 2018. There were several cases regarding Bitcoin frauds that also came to light between 2018 and 2020. With the growth in the adoption of cryptocurrencies comes the growth in the scam cases against it. There are several types of scams like fake ICOs, Cloned Fishing Websites, Fake support teams, fake exchanges and apps, cloud mining, ponzi schemes, pyramid and multi-level, fake pools and OTC scams, Pump and Dumps etc. are the types of scams that people fall prey into.
The best way to avoid them is to deal with the authorised exchange or a dealer who has the license to operate in the country and comes under the eyes of the financial regulator watch dogs. There should be certain limitations to be kept on the exposure of the high risk of involvement in the crypto business. Those who trade in cryptocurrencies should understand the risk they are taking.
Importance of Awareness
It is the need of the hour for the government to take certain measures to work with individuals and families to spot signs of distress in victims and to assist them. National Financial Education Program MoneySense which was launched in April 2021, highlights the awareness of the risks of investment scams involving cryptocurrencies and online trading.
The MAS also agrees on the importance of educating the public on the risks involved in cryptocurrencies. The foundation through many consumer advisories about certain cryptos, like cryptocurrencies, have no intrinsic value and are subject to major price swings.
Consumers are explained to spot red flags such as the promise of quick and substantial profits and are reminded from time to time to check the legitimacy of the organization, entity marketing the product before making any investment.
There are many questions that a buyer needs to ask and understand the investment opportunity. He should be very attentive to what response he gets from the company or avoids answering any questions. Keep a check on the companies’ owners, directors, associates, and management members. It is also essential to check the background of the company, its representatives and the credentials by using various resources.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
