Ex-Financial Advisor Lost Over $100,000 in Crypto Investment Scam

This article briefly:

A retired financial adviser lost £80,000 in a cryptocurrency scam while his father has terminal cancer.

· As with many scams of this type, victims opt for investment services that appear to be professional and legitimate.

Initially, he saw positive returns, but his investment started to dwindle and the company stopped responding to him.

A retired financial adviser in East Sussex has lost £80,000 (over $100,000) to a cryptocurrency scam. His father, who has terminal cancer, invested in digital currencies through a company that claims to be an investment specialist.

Simon Hoadley, 66, is looking for new ways to invest, according to The Mirror. His father is terminally ill and his wife lives in a nursing home. Also during the pandemic, with limited options, Hoadley decided to start investing in cryptocurrencies. During the first year of the pandemic, the cryptocurrency market saw unstoppable growth. Between March 1, 2020, and March 1, 2021, Bitcoin rallied approximately 430%. For many optimists, it's hard not to jump in.

Victim recovers £75,000 in cryptocurrency investment

The companies he approached, claiming to be investment experts, initially provided positive returns, which encouraged him to continue investing. The victim initially handed over £250, but ended up handing over £80,000, or about $102,000. However, it didn't take long before his "input" began to dwindle, and the company stopped responding.

After realizing he had been scammed, Hodley sought advice from a friend who worked in finance. After his friend suggested to go to the bank, the victim went to the bank as scheduled. While at the bank, he noticed that a scammer had just withdrawn $5,000 from his account.

Hodley then hired fraud specialists CEL lawyers for help, who contacted the Financial Ombudsman Service (FOS) on his behalf. Following their efforts, legal experts have managed to recover more than £75,000 from a fraudulent cryptocurrency investment vehicle.

FCA has received 59% more inquiries about cryptocurrency scams since 2020

This story is especially concerning because the victim has a background as a financial advisor. There is no doubt that Holdly is familiar with various financial crimes. Yet he falls victim to bad actors.

Despite warnings from the UK’s Financial Conduct Authority (FCA) about the risks of investing in crypto assets, more UK citizens than ever are taking the step. The UK financial watchdog has seen a 59% increase in inquiries about cryptocurrency scams since 2020.

Sadly, 79% of consumers who contact the FCA about potential cryptocurrency scams do so after investing.

This week, the FCA issued a warning against unregistered crypto asset recovery businesses, offering to help recover stolen cryptocurrencies. The FCA was blunt in a statement on its website: "Nearly all firms and individuals must be authorized by us if they offer, promote or sell financial products or services in the UK."