Crypto Scammers Dealt Blow After Companies House Registration Crackdown

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Scammers use a wide range of tricks to convince people that their scheme is genuine.

In the crypto and TradFi sectors, this includes making false regulatory and licensing statements in an effort to present themselves as a bona fide trading or investment company.

One other trick that’s extremely common is featuring a UK Companies House Certificate of Incorporation on the scam platform to ‘prove’ that the company is legitimate.

Unfortunately, acquiring a genuine certificate is an incredibly easy thing to do, and it doesn’t cost much either, making it a quick win for crypto scammers hoping to fool their victims.

Scam victims fall for Companies House certificate ploy

I’ve lost track of the number of times I’ve seen a genuine Companies House Certificate of Incorporation proudly displayed on a scam crypto trading platform.

The company number can be checked against the official database meaning it will stand up to scrutiny if a would-be investor is going the extra mile with their due diligence.

However, because of how the system currently operates, virtually anyone, anywhere in the world can secure a genuine certificate and use it with impunity to further their scam.

Often they use the addresses of an innocent person to register a fake crypto trading company (and fraudulent companies in many other sectors) which can cause multiple issues as a result of the activities of the scam company.

I’ve seen single residential addresses used to register multiple scam companies, together with small businesses and restaurants.

For example, one crypto scam outfit I came across claimed to be a global operation with plush offices in several major financial districts, but its registration address was actually a flat above a family-run Italian restaurant in Norfolk, UK.

New laws aim to halt scam Companies House registrations

Now though the UK Government has launched a crackdown in a bid to stamp out the practise of registering a fake company and using the resulting document to hoodwink unsuspecting investors.

The new laws mean that Companies House has greater power to crack down on the scammers by using several advanced tools to check the legitimacy of the information provided by someone who registers a company.

This includes verifying the identity information given at the point of registration, with Companies House now able to challenge and reject applications far more efficiently than before.

In addition to this, Companies House will be able to quickly remove scam or fraudulent companies that have either previously been registered or have slipped through the net during the new identity checks.

Protecting scam victims

In addition to removing the practice from the scammers’ toolbox, it’s also hoped the new laws will help people who’ve been a victim of identity fraud through bogus company registrations remove the fake listing far more easily than before.

I’ve long felt that the ease with which crypto scammers are able to secure a legitimate Companies House Certificate of Incorporation has made a mockery of the system.

I’ve had people who’ve been a victim of a crypto scam tell me that because they saw a certificate on a website, they believed the investment opportunity to be genuine.

Hopefully the new laws will help people spot the scammers more easily during their due diligence when looking to invest in crypto or any other financial product.

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