Fraudsters conned UK investors out of £36m of Binance’s cryptocurrency last year, according to figures released by the City of London Police.
The figure represents more than a sixth of crypto fraud reported to Action Fraud, the UK’s national cybercrime centre, which amounted to £204 million in 2021, almost double the figure in 2020.
Binance is the world’s largest crypto exchange, and is used by an estimated 28 million users worldwide. In 2017, it began issuing its own currency, BNB, which can be traded both on the Binance exchange as well as other online platforms such as FTX. The £36 million applies to all wallet and coin fraud.
Binance, along with its peers, is facing a tougher stance from regulators around the world as concerns grow about protections for retail investors.
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It was banned from carrying out regulated activities in the UK last year following a public warning from the Financial Conduct Authority. The FCA said Binance was “unable” to be monitored by regulators and posed a “significant risk to consumers”.
The exchange has also courted controversy as it faces one of the UK’s biggest competition claims ever, after the former head of the competition watchdog, Lord David Currie, launched a nearly £10 billion case against Binance and three other crypto firms in August.
Despite this, Binance won the support of soccer star Cristiano Ronaldo earlier this year, in one of the highest profile sponsorship talks between a crypto company and a sports player in history.
Ronaldo has 459 million followers on Instagram, giving him one of the biggest global reaches of any sports player. The FCA does not have the power to stop UK investors from using Binance’s exchange or trading its cryptocurrency, despite its blacklisting from any regulated activity in the UK.
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In total, the City of London Police said there were 9,288 complaints of cryptocurrency crime across all platforms and coins, with the average victim losing £21,620.
Simon Jones, chief executive of InvestingReviews.co.uk, which obtained the figures via a Freedom of Information Act request, said: “These police figures will do little to change the minds of those who believe that cryptocurrencies are the wild west of personal finance investments.”
Binance’s anti-crime unit is led by a former special agent of the Internal Revenue Service of the United States, Tigran Gambaryan. He said that while Binance supported the Binance coin, it “did not control it”.
Individually, Binance and other crypto exchanges will soon be made responsible for stopping criminals from moving assets off their platforms to avoid scrutiny, after a UK High Court judge ruled that exchanges should be recognized as trustees of stolen cryptocurrencies.
A June 24 ruling made public on July 12 also means that where UK nationals are affected by fraud, exchanges will be subject to UK law, even if they and the stolen assets are based abroad.
To contact the author of this story with feedback or news, email Alex Daniel
