Revolut is the most common recipient of Faster Payments made by crypto investment scam victims at Lloyds Banking Group, which is reporting a surge in get-rich-quick adverts on social media.
The number of cryptocurrency investment scams reported by victims so far this year has risen by 23%, compared to the same period in 2022, notes the bank.
The average amount lost by each victim of a crypto investment scam is £10,741, more than any other type of consumer fraud.
The analysis found that 66% of all investment scams start on social media - with Instagram and Facebook the most common sources. This includes a mix of bogus ads, fake celebrity endorsements, and targeting through direct messages.
The most common age range for crypto scam victims is 25 to 34 year olds, who make up a quarter of all cases.
Would-be crypto investors typically make an average of three payments before they realise they have been scammed, taking around 100 days from the date of the first transaction before they report it to their bank. By this point, the money is usually long gone, and impossible for the bank to reclaim.
Revolut is a favoured destination for scam payments among Lloyds Bank customers, acting as a staging post before the funds are moved on elsewhere.
In some cases there will be an actual investment account held in the victim’s own name and registered with a legitimate platform, such as Coinbase or Binance.
Either the victim will be shown how to set this up, or it will be opened on their behalf, as many trading platforms carry out limited checks when opening new accounts.
Once funds have been deposited, victims may be tricked into handing over their account login details, or passing control of their digital wallet over to the fraudster.
Liz Ziegler, fraud prevention director, Lloyds Bank, says: “Crypto is a highly risky asset class and remains largely unregulated, which makes it an attractive area for fraudsters to exploit. If something goes wrong, you’re unlikely to get your money back.
“Predictably, social media platforms are the main breeding ground for this type of scam, with a mix of bogus ads, fake endorsements and cloned accounts being key to fraudsters’ methods. It’s time these tech firms took responsibility for protecting their customers, stopping scams at source and contributing to refunds when their platforms are used to defraud innocent victims.”