Recent data from a specialist police unit in the United Kingdom indicates crypto fraud has risen by a third in the last year. According to the Financial Times, financial losses involving cryptocurrencies reported to Action Fraud (a reporting centre for fraud and cybercrime in the UK) were £226 million from October 2021 to September 2022, a 32 per cent increase over the same months the year prior.
The Web3 industry continues to face challenges stemming from the recent FTX fallout, the collapse of "stablecoin" Terra, and an increasing number of people falling victim to rug-pull scams and pump-and-dump fraud, all of which have impacted companies, individuals, and cryptocurrency and NFT value.
Since the pandemic, fraud in general is on the rise as more people have shifted their financial habits online. These latest reports, as well as scams and collapses, has led to a global loss of confidence in cryptocurrency; a number of UK banks have moved to limit or stop payments to crypto exchanges, the New York Attorney General is seeking to reject congressional bills allowing crypto investments through retirement funds, and crypto company, Binance, have launched a Industry Recovery Initiative with the hopes of restoring public faith in the future of web3.
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