UK Investment Manager Reportedly Suffers £300,000 Loss in Crypto ScamOctober 11, 2023
A high-ranking executive at a British investment company, identified here as Matthew Thomas to protect his identity, has reportedly revealed that he was swindled out of £300,000, his life savings, due to a sophisticated cryptocurrency scam, according to The Guardian.
Thomas, who is in his 40s, admitted that his judgment was likely clouded by a combination of greed, curiosity, and stubbornness. His story comes to light just as the United Kingdom implements stringent new advertising guidelines for cryptocurrency companies, aimed at enhancing consumer protection.
The fraudulent scheme that trapped Thomas apparently started in January. He was introduced to a cryptocurrency trading application by a friend. By July, Thomas had allegedly lost over £300,000, including around £60,000 that he had secured by mortgaging his home and an additional £20,000 acquired through a work loan, which he plans to repay in the coming years.
Thomas was initially informed that the trading app’s strategy involved capitalizing on price differences between cryptocurrencies across various exchanges. The platform claimed to use AI-powered bots to identify these opportunities. Despite finding the strategy somewhat implausible, Thomas noted that such opportunities do exist in the market.
To participate, Thomas had to establish a cryptocurrency wallet, deposit some cryptocurrency into it, and then link it to the trading app. Initially, he invested a modest amount and began receiving regular profit updates. After a month, he was informed that he needed to maintain a minimum balance of $10,000 (£8,280) to continue trading.
The Guardian reports that Thomas was invited to join an “airdrop” event, a common marketing tactic in the crypto world where new tokens are distributed to existing wallet holders. The app’s customer service team reportedly told him that in order to be able to receive airdropped tokens, he would need to maintain a balance of $100,000, which he agreed to; however, he was told later that he had been enrolled in a program with a $200,000 minimum balance requirement. Once Thomas had finished sending more money to his account to meet this requirement, he was told that he had been enrolled instead in an airdrop program with a $400,000 minimum balance requirement.
Growing increasingly suspicious, Thomas continued to invest additional funds, including money borrowed from his mortgage and workplace, according to The Guardian. However, he was allegedly unable to withdraw his money, and customer support falsely claimed that the International Monetary Fund (IMF) had frozen his funds due to potential illegal sources.
The Guardian’s article went on to say that the app’s customer support informed him that they had partnered with a well-known crypto exchange that could potentially recover his lost funds. Despite his skepticism, Thomas communicated with the exchange through a messaging platform and was told he needed to deposit an additional 10% to initiate the “unfreezing process,” according to The Guardian. After borrowing $40,000 and transferring it, he was informed that the process had failed and was asked for another $80,000.
Thomas has since reported the scam to multiple agencies, including the FBI in the U.S. and the National Crime Agency in the UK. He has also filed a complaint with the UK’s Financial Ombudsman Service.
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