What are cryptocurrency scams?

Cryptocurrency is a type of digital currency that generally exists only electronically. You usually use your phone or computer to buy cryptocurrency. You may have heard of Bitcoin or Ethereum, but there are many others, and new currencies continue to be created. Scammers are taking advantage of the new attention that crypto is gaining, offering fake investments to steal people's money.

Cryptocurrency is not protected by the UK Financial Services Compensation Scheme, and most are not regulated by the Financial Conduct Authority. Cryptocurrency investments are often made via currency exchange platforms. These are websites where you can buy, sell or exchange cryptocurrencies for other digital currency or traditional currency like US dollars or Euros.

Before investing in crypto you should be aware of the risk of scams. You should also be able to afford to lose all the money you invest.

What to look out for

• Social media advertising - scammers may use fake endorsements or images of celebrities to entice people to their website.
• Returns that seem too good to be true - scammers may offer returns that are exceptionally good, in order to encourage you to put your money in weak or even non-existent investments.
• Requests for sensitive information - never give anyone else access to your crypto wallet, as well as any financial or personal information.
• Demands for payment in cryptocurrency - only scammers will demand that you pay with cryptocurrency rather than a traditional currency.

How to stay safe

• The Financial Conduct Authority has a list of firms and individuals and the permissions they have to carry out financial activities. You can use this to check whether the person or company that has contacted you is genuine.
• If you receive a call from a company you recognise, but you are unsure if it is genuine, hang up immediately and call the number on the company's website.
• Never give out personal or financial details over the phone.
• Read our guide on how to stay safe online.