Crypto scam victims should not expect the government to compensate them after losing their money, according to the chief executive of the United Kingdom's Financial Conduct Authority (FCA).
Nikhil Rathi, the FCA chief, also said that some crypto assets are being used in crimes such as money laundering and that people who invest in them should be prepared to lose money.
The U.K.'s FCA currently has a unit that deals with the compensation of crypto scam victims, spending hundreds of millions in order to do so. However, that privilege may eventually be taken away by the government.
Crypto scams have been growing in number as of late. Scammers have been using different platforms and means to victimize investors, including taking advantage of crypto ATMS, Google Ads, and even YouTube.
Crypto Scam Victims Should NOT Expect Government Compensation
Crypto scam victims should not expect government compensation, according to the chief of the U.K.'s FCA.
According to a report by Blockchain News, FCA chief Nikhil Rathi said in a statement to the Treasury Committee that he "would suggest anything crypto-related should not be entitled to compensations, and consumers should be clear about that when investing."
Currently, a unit of the FCA known as the Financial Services Compensation Scheme (FSCS) has been compensating crypto rug pull victims. Per the Blockchain News report, £717 million has been issued as compensation.
That, however, may change given Rathil's stance against compensating cryptocurrency scam victims. According to the report, the U.K. may soon take away this privilege from crypto scam victims.
Rathi said that some crypto assets have no intrinsic value. "They have been a part of a series of organized crimes and money laundering, and anyone who invests in them must be ready to lose all of their money," he said in his statement.
Previous Crypto Scams
Crypto scams around the world have grown in number just as cryptocurrency itself grew more and more popular. Investopedia has defined cryptocurrency as "a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend."
The Blockchain News report highlights the skepticism that many governments around the world have over crypto. This is partial because cryptocurrency has no trusted safeguards for investors, which make scams a lot easier to happen.
Scammers have been using different platforms and techniques to scam unknowing victims, including the use of crypto ATMs and even Google Ads.
A recent example of crypto scam is a global YouTube cryptocurrency live stream scam that was reported here on Tech Times in October. According to the report, the scam involved 1,000 malicious domains.
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Written by Isabella James