A retired financial advisor from East Sussex lost £80,000 (over $100,000 USD) in a cryptocurrency scam while his father was battling cancer. He invested in the digital currency through a company that claims to be an investment specialist.

According to a report in the Mirror, Simon Hoadley, 66, was looking for a new way to invest. His father was terminally ill and his wife was in a nursing home. It was also during the pandemic, and with limited options, Hoadley decided to start investing in cryptocurrency. In the first year of the pandemic, the cryptocurrency markets were on an inexorable rise. Between March 1, 2020, and March 1, 2021, Bitcoin is up about 430%. For many who had a bit of optimism, it was hard not to jump in.

The victim recovered £75,000 of the crypto investment

The company he interacted with claimed to be an investment specialist and initially provided positive returns, which encouraged him to continue investing. The victim started out with a modest £250, but eventually paid out more than £80,000 – or roughly $102,000. However, his “investment” soon began to decline, and the company stopped responding.

Realizing he had been conned, Mr. Hoadley sought advice from a friend who worked in finance. After being advised of a trip to the bank by his friend, the victim duly pays the visit. While at the bank, he notices that the scammers have just withdrawn $5,000 from his account.

Hoadley then engaged fraud specialists CEL Solicitors to assist, who contacted the Financial Ombudsman Service (FOS) on his behalf. Thanks to their efforts, the legal experts have successfully recovered more than £75,000 from the fraudulent crypto investment vehicle.

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

The story is particularly troubling as the victim had a background as a financial advisor. There can be no doubt that Hoadley was aware of a wide range of financial crimes. Yet he fell victim to the bad guys.

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

Sadly, 79% of consumers who have reached out to the FCA about potential cryptocurrency scams have done so after investment.

This week, the FCA warning About an unregistered crypto asset recovery business offering to help recover stolen cryptocurrency. In a statement on its website, the FCA states: “Almost all companies and individuals must be authorized by us if they offer, promote or sell financial products or services in the UK.”