European regulators say scammers are exploiting the rollout of new EU cryptocurrency rules to defraud consumers, impersonating crypto firms and digital asset regulators to steal funds.
According to a Financial Times report published Thursday (Aug. 6), officials say fraudsters are capitalizing on the disruption caused by the regulatory transition. European financial watchdogs told the outlet they have observed a rise in scams targeting crypto customers since a July 1 deadline that required crypto companies operating in the EU to obtain licensing under new bloc-wide rules.
Under the new framework, crypto firms that fail to secure authorization are considered illegal and are required to notify their customers to withdraw or transfer their assets. Regulators warn this requirement itself has created an opening for criminals, who can pose as legitimate firms or regulatory bodies asking customers to move funds, only to redirect those assets to themselves instead.
The warnings highlight a risk associated with major regulatory transitions in the crypto sector: as legitimate companies work to comply with new licensing regimes and communicate changes to customers, bad actors can mimic those same communications to mislead consumers who may already be uncertain about which firms remain authorized to operate.
Source: PYMNTS
