Information on crypto investment scams

Reference Case Number: FOI8914

Freedom of Information: Right to know request:

Please could you tell me, in relation to this page: https://www.fca.org.uk/scamsmart/cryptoasset-investment-scams[1]

1. The number of reports the FCA has received about cryptoasset scams, and how many investigations have been launched by the FCA into scams. (Please break the data down by number of scams reported/investigated over the last five full calendar years)

2. The number of firms that have sufficient permission/license/authorisation to deal in or sell crypto assets (please provide the cumulative number over the last five years e.g. in 2016 it was X, this grew to Y in 2017, and so on)

3. The value of UK money that the FCA estimates is invested in unregulated crytoassets

FCA response:

Before we respond to your request, we would like to direct your attention to the information we publish on our website, which sets out the limits of cryptoassets regulation, and provides information on our work related to cryptoasset investment scams. This can be found at the links below:

https://www.fca.org.uk/consumers/cryptoassets[2]

https://www.fca.org.uk/scamsmart/cryptoasset-investment-scams[1]

The number of reports of cryptoasset scams received by the FCA in the last 5 years can be found in the table below.

Year	Reports of cryptoasset scams
2017	0
2018	991
2019	1,619
2020	3,143
2021	6,372

It should be noted that investment in cryptoassets is not a regulated activity. Cryptoassets and cryptoasset-related activities sit largely outside the regulatory perimeter. However, for the purposes of combatting money laundering and terrorist financing, in 2020 certain cryptoasset firms became subject to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs). These firms must be registered with the FCA. This regime is limited in scope, covering money laundering only.

Crypto advertising is also currently not FCA regulated, although HM Treasury has announced it will seek to extend the financial promotions rules to unregulated cryptoassests in the near future and the FCA is consulting on rules proposing to treat unregulated cryptoassets as a high risk investment for these purposes.

In the context of the largely unregulated nature of cryptoassets, where you refer to ‘investigations’ we take this to mean ones in which FCA investigators have been formally appointed under section 168 of the Financial Services and Markets Act 2000 (FSMA). On this basis, we have not opened investigations into any firms for engaging in such activities without FCA authorisation. As explained above, this is because in order for the FCA to be able to take regulatory action, a firm would need to be engaging in activity that fell within our remit and in breach of FSMA.

As explained in response to Question 1, certain cryptoasset firms are subject to a limited scope registration regime. A list of such currently registered firms[3] (including details of dates of registration).

3. The value of UK money that the FCA estimates is invested in unregulated crytoassets

We do not hold this information. As these firms operate in the unauthorised space, there is no requirement for this information to be reported to us, and we are therefore not able to track it.

We have, however, conducted a cryptoasset consumer survey, view more details[4].

Date of Release: 28/02/2022

Information on crypto investment scams - February 2022

Freedom of Information: Right to know request:

FCA response:

More information

Data