5:15 PM May 23, 2022
A 71-year-old man is warning others of the dangers of investing in cryptocurrency after losing more than £30,000.
When he began online investing into a Bitcoin scheme Gary Edwards dreamt of easing the financial burden of caring for his wife Brenda, 82, who has advanced dementia.
But instead of topping-up his savings he has been left in crippling debt after taking out bank loans to fund his crypto trading.
“Losing this amount of money is devastating for us,” said the retired engineer from Ten Mile Bank, near Downham Market.
“I did it all for the right reasons as I’m under tremendous pressure with Brenda. It’s a horrible situation and has been a big trap.”
Having seen his investment supposedly grow to $100,000 he took out two bank loans after being told he’d have to pay an upfront 20pc commission fee to withdraw the money.
But despite paying the fee he has not received any money and believes he may now have lost a huge chunk of his life savings including the £12,500 investment he made and £18,000 in loans and other top up payments.
“As time goes on I’m not hopeful of getting my money back,” he said.
The value of the best known cryptocurrency Bitcoin has dropped to less than half of what it was at its peak last November.
But Mr Edwards believes his losses are not just the result of falling prices but may also be a scam after he was encouraged to invest by someone he met on an online discussion group for motoring enthusiasts.
He initially became interested in Bitcoin two years ago and decided “I’m going to have a little dabble in this”.
His initial investment of “less than £1,000” was successful, almost doubling in value in five months.
Further investments also increased allowing him at one point to withdraw enough to pay for replacement windows in the couple’s riverside bungalow.
He said: “It is such an easy trap because I then put in a couple of thousand and after two or three months I had nearly £8,000, so I put £3,000 back in.”
Slowly he was drawn into investing increasing amounts encouraged by supposed fellow investors he had met online and a glossy looking trading platform.
But after paying the required commission fee, his efforts to discover what has happened to his investments have now drawn a blank.
“It just doesn’t make sense. You don’t know what is real or not. I cannot get to the bottom of it but what I do know is that I’m £30,000 out of pocket,” he said.
“I’m just about on the point of being able to afford the monthly payments for the loans I took out but caring for someone with advanced dementia I cannot get any work to fill the gap. And with the cost of living and energy price increases it’s a huge worry for us.”
Norfolk Trading Standards said it has seen more people being drawn into crypto currencies investment problems including scams.
Stephen Maunder, community protection officer, said: “All investments come with their own level of risk and anyone advertising investments has to put up those warnings that the value of investments can go down as well as up, so anyone looking into investing should always be starting at it from that point of view.
“Where the cryptocurrencies are slightly different is an awful lot of it is being advertised online and through social media. It is an area where people are promising big returns or even guaranteed returns you really do need to tread so carefully.”
Before retiring Mr Edwards ran a successful engineering business and said he had gone into crypto investing believing he’d done his “due diligence”.
“When I did my risk assessment, I thought if I do lose something I’ll be able to avoid it but now it looks like it’s completely fallen apart,” he said.
“People really need to think twice and don’t go by what’s being promised or a posh looking website. It’s so plausible. I thought I knew what I was doing and obviously I didn’t.”
What is cryptocurrency fraud?
Cryptocurrencies are known for their market volatility with the value of investor’s assets going up and down quickly but they are becoming increasingly popular with investors and an accepted form of payment.
As more people have invested their money, criminals have capitalised on this as an opportunity to commit fraud.
Action Fraud has warned one common tactic is the use of fake celebrity endorsements as well as credible looking online adverts, emails and websites advertising fake investment opportunities
It warns people not to be swayed by glossy websites, promises of high returns, and glowing reviews from ‘high net worth’ investors, but instead to seek advice from an accredited financial advisor.
Most firms selling crypto investments are not authorised by the Financial Conduct Authority (FCA) so you will not have access to the financial ombudsman or compensation scheme if things go wrong – so always check the FCA register and warning list of firms to avoid.