UK shuts crypto firm over fraudulent ponzi scheme

A UK crypto investment company that promised returns of up to 100% has been shut down after an investigation found no evidence that it carried out any genuine trading, with nine investors losing more than £300,000 between them.

A release on UK Home Office website on Tuesday noted that Key Coin Assets Ltd was wound up at the High Court in London on Tuesday, August 11, following action by the Insolvency Service.

The company had told investors they could receive guaranteed returns of between 40% and 100%, while one online post advertised “0 Fees, 0 Risks”.

The Insolvency Service said investigations found that money paid in by new investors appeared to have been used to pay earlier investors, a pattern it described as consistent with a “Ponzi-style” scheme.

Mark George, Chief Investigator at the Insolvency Service, said, “Key Coin Assets Ltd promised guaranteed returns but delivered nothing. Their behaviour displayed all the hallmarks of a Ponzi-style scheme.

“Investors were told their money was being invested in crypto, but our investigation found no evidence of any genuine trading at all. Instead, funds were simply moved into the director’s personal account, often within hours of arriving,” George said.

“We would urge anyone considering a similar offer to check whether a firm is registered before handing over their money, and to be deeply sceptical of anyone promising guaranteed returns with no risk,” he added.

The Insolvency Service said bank records showed funds were often transferred into the company director’s personal account on the same day they arrived, after which they became difficult to trace.

The company also allegedly posted fake customer testimonials online without permission and instructed investors to avoid using words such as “crypto” or “investment” when making bank payments.

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The Insolvency Service said the instruction appeared intended to avoid scrutiny.

Investigators also found that the company failed to provide accounting records when requested.

Key Coin Assets Ltd repeatedly changed its registered address, including to a flat whose occupants told investigators they had never heard of the company, it noted.

Companies House filings also claimed the company had “assets worth as much as £42m, although its actual banking activity suggested otherwise,” according to the Insolvency Service.

The Official Receiver has been appointed as liquidator of the company.

Following the winding-up, the Insolvency Service and the Financial Conduct Authority have warned prospective crypto investors to be cautious of similar offers.

The agencies advised “anyone considering a crypto investment to use the FCA’s Firm Checker to establish whether a company is registered and to consult the FCA’s list of unauthorised firms.”

They also warned consumers to be wary of “guaranteed high returns,” firms asking them to avoid normal payment references and “schemes that encourage investors to recruit others.”