Fraud cost the UK economy £14.4 billion between 2023 and
2024, and the government plans to spend £250 million over the next three years
to fight back. In its newly published 2026–2029 fraud strategy, the Home
Office identified cryptocurrency scams as a growing threat to consumers and
businesses.
Crypto Scams Emerge as a Core Focus
The policy paper warns that criminals are exploiting digital
assets to trick victims into transferring money through social media and
messaging apps. It labels crypto among the “emerging payments” where
“vulnerabilities remain,” calling its risks both financial and reputational.
Authorities say they are enhancing the National Crime
Agency’s capacity to trace fraud tied to cryptocurrencies and supporting the
Serious Fraud Office in crypto asset investigations.
These steps follow the FCA’s earlier crackdown on misleading
crypto promotions and HM Treasury’s development of a new regulatory framework
for digital assets due in October 2027.
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Under that framework, all crypto firms serving UK consumers
will need FCA authorization and must meet the same standards as traditional
financial companies.
Recently, the UK government announced plans to bring crypto under full FCA supervision by 2027 after UK Finance data showed a 55% jump in
crypto related scam losses, while the FCA has accelerated its registration
process and now approves around 45% of applicant firms, up from below 15% over
the past five years.
Regulation Meets Politics
The government’s paper avoided mention of ongoing political
debates over crypto donations. Lawmakers are weighing whether to ban digital
contributions to parties after high-profile figures such as Nigel Farage
publicly supported them. In 2025, early crypto investor Christopher Harborne
donated about $16 million to Farage’s Reform Party.
A separate report by the Financial Action Task Force show show deeply fraud has embedded itself in mature financial systems, with the
crime now accounting for more than 40% of all recorded offences in the UK.
The paper warns that cyber‑enabled fraud has become one of
the most widespread profit‑driven crimes globally, as rapid
advances in technology, new payment rails and virtual assets allow criminals to
move funds across borders at speed while stretching existing AML and CFT
controls.
The report illustrates how this trend plays out across key
hubs. Singapore, for example, recorded a 61% jump in cyber‑enabled
scam cases over just two years, while some countries estimate that up to 15% of
adults have already fallen victim to successful online fraud attempts.
FATF links this surge to post‑pandemic digital adoption and
increasingly sophisticated social‑engineering tactics that exploit
digital platforms, instant payments and tools such as AI and deepfakes to reach
victims at scale.
This article was written by Jared Kirui at www.financemagnates.com.
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