Fraud in the age of cryptocurrency: protecting your digital wealth

‘Don’t put down the phone, I need you to transfer the money right now.’ Upon hearing these words, as a first-year international student who has been living in London for barely a month, I panicked. Fortunately, I quickly ended the call, but I know various international students like me who were not so fortunate.

An event during this year’s National Student Money Week, ‘Cryptocurrency: protecting your digital wallet’, educated us about the risks of investing in cryptocurrency and about safeguarding our digital wallet. 

A new approach to finance 

Phillipp Jovanovic, an Associate Professor in Information Security at UCL, commenced the event by informing us about the history of money, and how society went from analogue to digital money in the past three decades. The evolution of cryptocurrency has paved the way for programmable money, offering a new approach to financial transactions not governed by traditional institutions. Bitcoin, a prominent example of cryptocurrency, operates on a decentralized network, where users can transfer funds through a public ledger known as the blockchain.

Questions around crypto 

This new generation of cryptocurrency has made advancements to improve the efficiency and privacy of digital transactions. However, Phillipp points out that as crypto continues to reshape the financial landscape, questions arise regarding legal and ethical implications, surveillance, and privacy protections. How do we protect our privacy? Who is advantaged in this situation? Most importantly, what happens when the technology crashes? “We can’t deny,” he says, “that cryptocurrency opens new possibilities for how we interact and transact within society, but it is nevertheless worth being careful with cryptocurrency as it has opened a new field of scams.”

Steven Ngo, the president of the UCL Blockchain Society, shared his insights on the growing importance of blockchain technology and digital currencies in the future. He discussed the educational initiatives of the society, which aim to introduce students to the world of blockchain through lectures, workshops, and hackathons. Steven does not tend to use cryptocurrency much in his own life. He acknowledges that there is a risk in using cryptocurrencies where you could lose your key and, hence, all your money. He claims that in the future, crypto will be used much more as more companies will gravitate towards using blockchains, thus opening a branch of new careers. 

The risks are real 

As both Steven and Phillip mentioned, cryptocurrency opens a new window towards uncertainty and, sadly, scams. Crime officers DS Rebecca Corser and PC Tom Conley from the Metropolitan Cyber Prevention team highlighted the various types of online fraud and scams (i.e. investment fraud, sextortion, cyber kidnapping) that target individuals who store their assets in cryptocurrencies. People aged 18-24 lose the most money, and from April to June 2023, the British people lost £600million, while 86% of fraud remains unreported. 

How to protect yourself

As everything positive for us in cryptocurrency is also beneficial for the criminals, Tom shared the Golden Rules to preventing Crypto Crime:

1. Do not be rushed. Criminals want to trigger an emotional response from you since it would make you think irrationally.
2. If it sounds too good to be true, it probably is. Do not take investment advice from influencers like Kim Kardashian. ALWAYS do your OWN research.
3. Be wary of unsolicited contact which prompts you to act or divulge information.
4. NEVER click on anything that you are unsure of and look for subtle differences in URLs.
5.  Do not advertise your holdings the same way you would not advertise your wealth. This can make you a target for criminals.
6. Passwords: both the length and complexity are important. Do not use passwords specific to yourself (please do not use something like UCL123), and always safely store away your recovery seeds, preferably separating them and not on your phone.

Find out more

As the world moves towards a more digital and interconnected financial system, we need to educate ourselves on the risks and best practices for securing digital assets.

Check out the Little Media Series created by the Metropolitan Police for guidance on common fraud types and prevention tips.

If you are a victim of fraud, do not be shy and report it first-hand to the police and Action Fraud (0300 123 2040).

Should you have any crime-related concerns, please do not hesitate to contact UCL's Crime Prevention and Personal Safety Advisor Sophie Bimson to ensure that you have appropriate support. Remember, UCL is here to help!