I'm placing this here as a reminder for current investors and a warning for future investors:
Last year a family member inherited a sizeable amount of money as an inheritance (a little under £100k).
Despite having zero knowledge of economics, investing or financial management they went ahead and decided to invest it all themselves. [Error 1]
They chose to invest ALL of it in cryptocurrency. [Error 2]
They used a phone app to use the Binance platform to make the investment. [Error 3]
(Luckily) they found that their investment had risen sharply and decided to cash out.
Now we're not certain of the details of how this happened but their account was 'frozen' and they began an online correspondence via Messenger with someone with views to releasing the funds (warning bells!).
We think they followed an email link to try and cash out. [Error 4]
In order to cash out their crypto they were told that they had to deposit £20k to 'cover the costs'.
This was apparently stated by "a guy from the FSA" (alarm bells are going crazy now!).
They didn't have that cash to hand so took out a 'payday loan' for the £20k thinking that they'd soon be able to pay it off. [Error 5]
At this point they suspected that they had been scammed and raised the issue with the person with whom they'd been corresponding with via Messenger.
This person "expressed their alarm at being scammed and stated that the guy from the FSA was probably a scammer".
This person then said "I can see your account but it does need £15k deposited in another account for us to release it".
The said family member was about to get another loan when they finally told us!!!! [Error 6 averted]
So, it's been lodged with the Police and the bank have been informed of the scam that resulted in the original £20k loan being taken out.
- chances of recovering the original crypto investment...probably nil.
- chance of being saddled with the £20k payday loan at 30%p.a. interest...quite high.