UK shuts crypto firm over fraudulent ponzi scheme

UK authorities have shut down a cryptocurrency investment firm accused of operating a fraudulent "Ponzi" scheme that promised returns of up to 100%. Key Coin Assets Ltd, based in the UK, was wound up at the High Court in London on August 11 following an investigation by the Insolvency Service. According to the Insolvency Service, the company promised guaranteed returns of 40-100% to investors, but there was no evidence of genuine trading.

Instead, money paid in by new investors was used to pay earlier investors, a classic Ponzi scheme pattern. The Insolvency Service found that the company repeatedly changed its registered address, failed to provide accounting records, and posted fake testimonials online. Investigators also noted that funds were often transferred into the director's personal account on the same day they arrived, making them difficult to trace.

Mark George, Chief Investigator at the Insolvency Service, warned potential investors to be cautious of firms promising guaranteed returns with no risk. The Insolvency Service and the Financial Conduct Authority have advised consumers to check whether a firm is registered before investing and to be wary of "guaranteed high returns" and schemes that encourage investor recruitment.