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Catherina Cunnane
Catherina Cunnane
Catherina Cunnane hails from a sixth-generation drystock and specialised pedigree suckler enterprise in Co. Mayo. She currently holds the positions of editor and general manager at That's Farming, having joined the firm during its start-up phase in 2015.
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Cryptocurrency scams: ‘Do your homework’ before investing

Gardaí have reported that cryptocurrency scams are on the rise.

According to An Garda Síochána, there has been a 67% increase in reports of investment fraud in 2021 compared to the previous year.

It received 234 such reports, amounting to €12.4 million last year, up 140 reports, totalling €8 million, in 2020.

According to Gardaí, between 2019 and 2021, over €24 million was stolen through investment fraud from “ordinary” people nationwide, with many losing their pensions or life savings.

Following the publication of a case in the Department of Financial Services and Pensions Ombudsman’s Overview of Complaints 2022 report, we explain to readers what investment fraud is, how they can identify it and avoid it.

This article follows the body’s case study involving a man who fell victim to two separate tractor and cryptocurrency scams.

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He was attracted by an advertisement promoting cryptocurrency investment and paid up to €20,000 as a means of recouping losses after sending money to the UK to pay for a tractor which he saw advertised on an online private sales platform. You can read the full news story.

An Garda Síochána asks the public to “do their homework” before making any investments, given the sustained rise in investment fraud involving cryptocurrency.

According to Gardaí, virtual currencies are “high risk and unregulated” in Ireland, so you should always check the company’s regulatory status you are dealing with before parting ways with any of your money.

What is investment fraud?

Gardaí defines investment fraud as when criminals posing as investment managers fool someone into investing money in schemes and projects that do not exist.

Currently, it says that most investment fraud involves cryptocurrency with fake investment managers, cloned websites or unregulated companies promising ‘once-in-a-lifetime opportunities’ with fast and enormous returns.

Sometimes, they may even appear to be endorsed by reputable business-people or celebrities, but without their knowledge, Gardaí say.

Victims are sometimes persuaded to download links that allow criminals to access their computers and empty their bank accounts.

How to identify an investment fraud?
  • In most cases, fake companies/websites offer “huge and quick” returns on investment in cryptocurrencies as a hook;
  • The fraudulent website is hosted outside of the EU, or the company is registered in a country far away where there is no regulation or come back;
  • The fraudulent websites can be what Gardaí describes as “very slick and professional-looking”. You may even receive graphs, charts or projections showing how your investment is doing. They may try to encourage you to part with even more of your money;
  • Pop-up ads that appear on your social media feed for cryptocurrency investments often claim to be endorsed by well-known business people or celebrities;
  • You are being rushed into accepting an offer. The ‘investment manager’ says you will live to regret it if you do not invest right now.
Gardaí went on to explain how you can avoid investment fraud
  • Firstly, do not invest until you get reliable financial and legal advice;
  • Check the company’s regulatory status on the Central Bank of Ireland’s website;
  • Do not respond to pop-up/social media ads or messages with “wild” claims about investment returns;
  • You should ignore unsolicited approaches or cold calls about investments;
  • Beware of celebrity-endorsed investments – they may not even know that the fake company/website is using their name;
  • Be wary of fake wallets (for storing your cryptocurrency). These can be scams for malware to infect or control your computer
  • Furthermore, do not click on links to websites you do not know. Check to see if the site is HTTPS secured;
  • You should never allow anyone remote access to your computer or download apps that give others control of your computer;
  • Never disclose personal data or bank account passwords or codes.

In summary, Gardaí advise the public to:

  • Do your homework before making any investments;
  • Always seek professional financial and legal advice;
  • Only use regulated entities;
  • Be wary of “too good to be true offers”.
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