A large-scale cryptocurrency scam in France is believed to have affected over 700 people, local media outlets are reporting.
Scammers are believed to have approached over 700 victims over the course of 2018. Total losses from all victims are believed to surpass 31m euros, equivalent to 35m US dollars or around 27m British pounds.
According to industry media, those behind the fraud took out false investment adverts and also utilised over the phone selling in order to get the investors to part with their cash.
The fraudsters allegedly promised high returns in exchange for investment cash, luring the traders in to the scheme.
Regulator the Autorité des Marchés Financiers, or AMF, confirmed the figures.
Several French and European industry experts spoke about the crypto scam.
“Bitcoin is very complex to understand, very technical. Investors do not necessarily understand what is happening but simply say: this time, I do not miss the opportunity to earn money,” said Helene Feron-Poloni, a lawyer.
According to Brian O’Hagan, who is the marketing director for Coinhouse, previously known as Bitcoin House, the problem of internet-based crypto fraud is highly prevalent across Europe.
“It’s a scourge, we’ve spotted over 200 fraudulent websites.”
“In Belgium, the government already expects a fraud exceeding 100 million euros! So, in France, a country with five times more inhabitants, one can fear that this causes several hundreds of millions of euros of damages”, he added.
A significant chunk of the world’s ICOs, or initial coin offerings, take place in Europe. It occupies 30% of the global marketplace for this kind of project, meaning that there’s a large crypto community here.
However, with scams like this one taking place, regulators in the EU have been pushed towards taking a stronger approach – and it appears that change may be on the horizon.
Just yesterday, for example, a leading figure in the European crypto regulation world said that his team were going to release a major report on the topic in the coming year.
Steven Maijoor, who is the chair of the European Securities and Markets Authority (ESMA) said his team was currently grappling with the issue of categorising and sorting the different cryptocurrencies.
“The subsequent question is what do we do with those ICOs that are outside the regulatory world. We will assess that as a board. We expect to report by the end of the year”, he said.
This is not the first hint of alleged cryptocurrency fraud in France in recent times, though.
Last month, the AMF released a comprehensive blacklist containing over twenty new companies which is recommended French traders avoided using.
However, the political climate in modern France is relatively crypto-oriented. French President Emmanuel Macron, who ran on a pro-business platform and has sought to make conditions in the private sector easier, is believed to be in favour of cryptocurrencies.
As part of his platform, for example, there has been a major drop in the amount of tax levied on cryptocurrency profits.