Surge in Crypto Scams: FSMA Sees Significant Spike in Recovery Room Fraud

The Financial Services and Markets Authority (FSMA), Belgium’s financial regulatory agency, has published its mid-2024 report, highlighting a significant increase in fraudulent activities, particularly involving trading platforms and cryptocurrency scams. Nearly half of the 1,332 consumer reports received in the first half of 2024 pertained to these scams, reflecting a 44% increase from the same period in 2023. A notable rise was observed in recovery room fraud, which saw a 59% increase compared to the previous year. This type of fraud involves scammers recontacting previous victims of investment scams, posing as lawyers, investigators, or regulatory officials offering assistance in recovering lost funds. These fraudsters typically demand upfront fees or personal information, exploiting the victims’ desperation for recovery. The FSMA issued nine new warnings regarding 187 fraudulent entities and 239 websites, along with two thematic warnings about shadow investing and the misuse of its name. The FSMA’s vigilance and consumer education initiatives underscore the ongoing challenges in addressing cryptocurrency-related fraud and protecting investors from evolving scams.