We’ve seen a growing interest from customers in cryptocurrencies and virtual assets. While these digital investments seem like an exciting investment opportunity, they also come with significant risks, especially when compared to traditional financial products.
What is Cryptocurrency
Cryptocurrency (often referred to as “crypto”) is a form of digital currency that operates independently of traditional banking systems. It uses cryptography for security and is typically stored in digital wallets. Popular examples include Bitcoin, Ethereum, and stablecoins.
Why you should be careful
Crypto scams are becoming increasingly common and sophisticated. Criminals use a variety of tactics to trick people into handing over their money:
- Fake adverts often feature celebrities to make scams look legitimate.
- Too-good-to-be-true offers promising guaranteed profits are usually fraudulent.
- Scams can target anyone, regardless of financial status or experience.
Common cryptocurrency scam methods
Here are some of the most frequent ways scammers operate:
- Romance scams: Scammers build online relationships and then persuade victims to invest in crypto or send funds via crypto exchanges.
- Fake investments: Offers of “amazing returns” or “guaranteed profits” are often fraudulent.
- Deepfakes: Criminals use AI-generated videos or images of celebrities to make their scams appear real.
Understanding the risks
While investing in virtual assets can be appealing it’s important to understand the real risks involved.
Here are the key risks to be aware of:
- Lack of regulation: Many cryptocurrencies are not regulated by competent financial authorities, meaning there’s little oversight or consumer protection.
- No compensation schemes: Unlike bank deposits, money held in crypto wallets is not covered by regulatory compensation schemes.
- Irrecoverable losses: If your crypto is lost due to fraud, theft, or technical failure, there’s often no way to recover it.
How to protect yourself
We encourage all customers to be cautious when engaging with virtual assets. To stay safe when dealing with cryptocurrencies, consider the following precautions:
- Do your research: Always verify the legitimacy of platforms and consider seeking independent financial advice before investing.
- Stay in control: Never allow someone else to set up a crypto wallet or upload your identification documents on your behalf.
- Ignore unsolicited offers: Be wary of unexpected messages or investment opportunities that come out of the blue.
- Don’t trust everything online: Scammers often use fake celebrity endorsements and deepfake content to make their offers look legitimate.
- Avoid pressure tactics: Offers that claim to be “limited time” or promise “guaranteed returns” are common red flags.
Our commitment to your security
To help protect our customers we may restrict payments to or from cryptocurrency exchanges or transactions involving crypto assets. These measures are designed to safeguard your money and reduce exposure to fraud.
We do not allow:
- Transactions to or from unregulated or decentralised crypto platforms
- Payments involving crypto wallets
- Use of unregulated DeFi (Decentralised Finance) services
- Activity involving algorithmic stablecoins
- Transfers to exchanges flagged by law enforcement or regulatory authorities
Key takeaway
Crypto can be exciting but it’s also risky. Take your time, think carefully, and never send money unless you’re 100% sure it’s safe. For more information on how we help protect your finances and support secure banking, visit our Security and Fraud section.
