Rising Crypto Scams in France: What's the Situation?

What’s the state of cryptocurrency scams in France right now?

The popularity of cryptocurrency in France is at an all-time high, but this has brought its own set of problems. Financial scams are on the rise, with a report indicating that victims of phony savings accounts have lost an average of €69,000, while those duped by fake loans have lost €19,000. Since mid-2023, crypto-asset scams have skyrocketed, with average losses hovering around €29,000 per victim. A recent survey showed that 3.2% of French adults fell victim to financial scams in 2024, up from just 1.2% in 2021. Younger men, especially those under 35, are the primary targets, often lured in by compelling social media advertisements.

How are authorities reacting to these scams?

The Paris Public Prosecutor's Office, along with other regulatory agencies like the AMF and ACPR, is racing against time to tackle the surge in scams claiming to offer fake crypto investments. Their focus is on both enforcing the law and spreading awareness, including launching campaigns to inform the public about the risks associated with crypto scams. It's crucial to verify investment platforms before sending any money. The AMF and ACPR are also working to prohibit unauthorized crypto entities, collaborating with law enforcement to pursue offenders.

What new tricks are scammers using now?

The methods employed by scammers are becoming increasingly sophisticated. One of the most alarming is the use of AI-generated content, including deepfake videos, which fool victims into thinking they are engaging with credible individuals. Another recent tactic, "square fraud", involves scammers pretending to be officials who reach out to previous scam victims, claiming they can assist in recovering lost funds for a fee. These enhanced strategies necessitate greater vigilance among investors.

Are awareness campaigns effective in fighting scams?

Public awareness campaigns are vital in the fight against crypto scams, as they aim to educate people about the risks and tactics used by scammers. Initiatives like Operation Spincaster, which disrupts scams using blockchain analytics, have shown that public education can work when combined with proactive measures. However, the ever-evolving nature of scams means that these campaigns must be continuously updated to remain effective. The level of success hinges on the campaigns' ability to adapt to new methods.

Are secure payment platforms crucial in preventing scams?

Yes, secure payment platforms are essential in preventing crypto scams, especially in international transactions. They incorporate various technologies and practices to enhance security, including:

• Encryption and blockchain technology to safeguard transaction data.
• Consensus mechanisms to validate transactions and prevent fraud.
• Multi-signature wallets to add an additional level of security.
• Tokenization to minimize the risk of fraud.
• Regulatory compliance and AML/KYC to adhere to legal frameworks.
• Advanced security measures to protect user accounts.
• AI and automated security to identify and mitigate threats.
• Private and permissioned blockchains to ensure access control.

These measures collectively make payment platforms safer, ensuring that cross-border transactions are more secure and transparent.

How can companies maintain compliance without hurting efficiency?

To maintain compliance with crypto regulations while still operating efficiently, companies should adopt several strategies:

• Create a thorough compliance program tailored to the business's specific risks.
• Implement a risk-based approach to compliance, assessing individual risk and keeping profiles updated.
• Use compliance technology to automate processes and minimize manual work.
• Stay informed about regulatory developments to adjust as necessary.
• Facilitate continuous training and maintain strong communication across teams.
• Adapt to jurisdiction-specific regulations for different regions.
• Embrace continuous compliance by regularly updating procedures.

By taking these steps, companies can effectively comply with crypto regulations without compromising their operational efficiency.