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Cryptocurrency fraud: real life story

Criminals are using cryptocurrency as an opportunity to steal your money.

Cryptocurrency is a digital asset that can you trade or exchange online. It's grown in popularity in recent years and some investors see high returns.

But cryptocurrency is high risk, very volatile and not regulated, so there's no protection for investors if things go wrong.

Here’s the story of one HSBC customer who fell victim to a cryptocurrency scam. The details are fictitious but are based on a genuine case. We've changed all the names, locations and other aspects to protect the anonymity of the people involved.

Started investing in cryptocurrency

Melissa had banked with HSBC for 11 years and had never tried her hand at investing before.

She followed a well-known influencer on social media, who portrayed himself as a successful businessman with a focus on promoting investments. 

This piqued her interest. When she got in touch with him directly online, he persuaded her to start investing in cryptocurrency. 

Nothing appeared unusual or suspicious at this point. 

The influencer seemed successful and had persuaded other people to invest in similar opportunities.

How she funded the investments

First, the influencer told Melissa to open an account with a cryptocurrency trading platform to get started.

She also provided the influencer with access to the new account so he could help manage her investments.

Melissa made payments from her HSBC account to her new cryptocurrency account, so she could trade.

The influencer contacted her regularly over 13 months with investment advice. He led her to believe her investment was growing in value. This is something fraudsters do to maintain trust. In that time, Melissa made 160 payments amounting to more than £300,000.

Melissa said: "I actually sold many of my assets to help fund these payments because he kept telling me that I would make significant returns on these investments."

Promising high returns is a common method that fraudsters use to convince customers to invest more.

Coached by the fraudster

Many of these payments triggered our fraud detection mechanism. As a result, we made several calls to Melissa to discuss the payments. 

However, the fraudster had coached Melissa into how to respond to these calls. Again, it's a common technique that criminals use to try to stop banks from spotting fraud.

Melissa finally found out she'd fallen victim to a cryptocurrency scam when she spoke to a family member about her investments. They searched online for the influencer and the supposed investments. That's when they realised he wasn't legitimate and there were a number of scam warnings.

By the time Melissa reported it to us, the fraudster had already moved the funds out of her account and her money was gone.

Explore: Latest scam warnings

How to avoid cryptocurrency investment scams

Fraudsters will try to tempt you into investing in cryptocurrency by:

  • contacting you by phone or on social media platforms
  • advertising investments that don’t really exist or have falsely high returns
  • convincing you to sign up with a cryptocurrency provider with your identity documents to open a trading account or online wallet
  • setting up fake but realistic-looking websites and portfolios
  • asking you to share access to your account
  • asking you to download remote access software

What you should do:

  • check how it works - it may differ from a traditional investment
  • stay in control - never let anyone set up a cryptocurrency wallet, upload ID documents or manage investments for you
  • don't share access - fraudsters may ask you to download software so they can access your devices and move money without your knowledge
  • spot familiar tricks - you may be asked to move money and asked to mislead your bank about the reason for making the payment. Fraudsters know these payments may attract more scrutiny and will try to avoid it
  • don't fall for fake endorsements - fraudsters may impersonate famous personalities on social media or messaging groups, to make their offer look legitimate
  • don't be pressured - high value cases even give a return in the short term, to convince you to invest more. Then, after larger payments are sent, you suffer even greater losses