Swedish Financial Regulator Warns of Surge in Investment Fraud Cases, Cryptocurrency Use on the Rise

Despite economic uncertainties, Sweden saw an all-time high in investment fraud cases in 2022, according to the Financial Supervisory Authority (FI). Last year, FI issued warnings for over 3,400 unauthorized firms and websites, a 25% increase from the previous year.

Fraudsters Taking Advantage of Economic Downturn

“Unbelievably, fraudsters are taking advantage of the economic downturn and growing uncertainty to deceive unsuspecting consumers,” said Mikael Sandahl, a supervisor at FI. “Despite the slumping stock market and declining value of cryptocurrencies, fraudsters are actively encouraging people to invest during these challenging economic times, promising quick profits with minimal risk.”

Use of Cryptocurrencies in Fraud Schemes Surges

The use of cryptocurrencies in investment fraud schemes has surged, with more fraudsters demanding payments in Bitcoin to evade detection. FI observed an expanding number of scams in 2022 where consumers were instructed to deposit funds into a digital wallet or make payments through a cryptocurrency exchange.

Tip: Be wary if you’re asked to make a transaction using Bitcoin or another cryptocurrency. Reputable financial organizations do not solicit payments in this way.

Fraudsters Claim to Represent Established Firms or Authorities

In 2022, FI received numerous reports of fraudsters posing as legitimate firms, including well-known crypto companies like Binance or Blockchain, or even government authorities. These scammers often called consumers, offering to help recover lost funds from past fraudulent schemes or promising high returns on investments.

Some fraudsters even went so far as to create fake websites posing as the official Swedish authority for supervising financial firms, such as ofi-se.org. FI has repeatedly issued warnings about these websites and collaborated with hosting companies to remove them, but they continue to resurface.

Scams Persist in Final Quarter of 2022

FI issued several warnings in the last quarter of 2022 regarding suspected investment fraud schemes. For instance, Royal Oak Investment, which offered contracts for difference (CFD) trading linked to cryptocurrencies, asked consumers to transfer funds to a crypto wallet before investing. Another scheme, Aerofinancing, claimed to have offices in New York and London and offered CFD trading in cryptocurrencies, but turned out to be a façade for fraudulent activities.

Protecting Yourself from Investment Fraud

To protect yourself from investment fraud, FI advises consumers to stay informed about ongoing scams and common methods. Here are five tips to help identify potential fraud attempts:

1. Be wary of unsolicited investments or contacts promising above-average returns
2. Don’t deposit funds into bank accounts controlled by others
3. Research the company or person offering the investment
4. Be skeptical of pressure tactics or high-pressure sales pitches
5. Check if the firm is authorized to provide financial services and registered with FI.

By staying informed and vigilant, consumers can protect themselves and avoid falling victim to investment fraud schemes.