Man loses more than €1m as gardaí reveal 'colossal jump' in crypto fraud

The West of Ireland native is just one of 234 people who reported investment fraud to gardaí in 2021
Man loses more than €1m as gardaí reveal 'colossal jump' in crypto fraud

The €1 million he lost is among €12.4 million stolen in cryptocurrency investment fraud cases reported to gardaí last year. File photo

A man in the West of Ireland has been duped out of more than €1 million in a cryptocurrency investment fraud.

The Central Bank has issued a fresh warning about investing in cryptocurrency as officers in the Garda National Economic Crime Bureau investigate the case. The man was one of 234 people who made reports to gardaí in 2021 about investment fraud – up from just 50 reports in 2019.

He lost the money in seven transactions carried out in a five-month period in mid to late 2021. The €1 million he lost is among €12.4 million stolen in cases reported to gardaí last year, according to Detective Superintendent Michael Cryan of the Garda National Economic Bureau.

He said: “In 2019 there was about €4 million reported stolen, €8 million in 2020 and about €12 million in 2021. That is a colossal jump.” He said that people wishing to invest in cryptocurrency can come across websites online which appear legitimate.

Some of them, however, are "completely bogus", while others are cloned copies of legitimate websites. 

He continued: “If you go on to one of the fake sites and put in your details, very quickly you will get phone calls with very good salesmen who will be pushy, offering you a once-in-a-lifetime opportunity which you need to jump at now or you will lose out.” 

In its Securities Markets Risk Outlook Report published this month, the Central Bank says that while the nature and characteristics of crypto-assets vary considerably, “crypto-assets are likely to be highly risky and speculative”.

In a statement to the Irish Examiner, the Central Bank warned: “Consumers who are considering investing in a product should carefully consider their investment objectives, level of experience, and appetite for risk. 

"It is important that consumers take time to review all material information about the investment, the way it operates, and associated risks. The value of an investment may go down as well as up and consumers should take care not to invest money that they cannot afford to lose. 

"The Central Bank notes the pace at which the crypto ecosystem is growing and the Central Bank continues to identify and closely monitor risks associated with crypto assets.” The Central Bank also points out that cryptocurrencies are currently unregulated.

Cryptocurrency adverts

Meanwhile, the Advertising Standards Authority of Ireland is currently investigating four complaints received about advertising relating to cryptocurrency investment. Four such complaints have been received by the body since December 2019.

A spokeswoman said that the ASAI is aware of concerns “about consumer knowledge of cryptocurrencies.” The statement added that in addition to “truthfulness, honesty and substantiation”, the ASAI’s code contains a number of rules related to financial advertising. 

Section 13 of the code outlines that “marketing communications should make it clear in a prominent manner that the value of investments is variable and, unless guaranteed, can go down as well as up”.

Fine Gael Dublin Mid-West TD Emer Higgins has raised the lack of regulation for cryptocurrency with the Minister for Finance Paschal Donohoe recently. She describes trading in cryptocurrencies as a higher risk activity.

She said: “That's why I believe that at the very least we need to have warnings on cryptocurrencies. Government absolutely supports the development of new financial technologies, to spur innovation and digitalisation. However, the warnings from the Central Bank are clear regarding the risks of buying or investing in virtual currencies.” 

She said that as cryptocurrencies are not guaranteed by the Central Bank, investors have no guarantees or safeguards, unlike with regulated financial services.

According to a survey of 1,529 Irish people published last month by personal finance site, Bitcoin is Ireland’s most popular cryptocurrency, with 44.3% of those who invested in cryptocurrency having opted for it. The second most popular coin is Ethereum at 26.7%, with Dogecoin in third place at 23.9%.

The Finder survey also found that men in Ireland are roughly 1.6 times as likely as women to own cryptocurrency – among crypto owners, 62% are men compared to 38% who are women.

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