Belgian Government Launches Website to Help Citizens Spot Fraudulent Crypto Companies

The emergence of blockchain and cryptocurrency in the mainstream market has spawned numerous startups trying to leverage the technology’s benefits. Consequently, the rise of fraudulent companies has also increased, riding the waves of popularity that the crypto market caused.

With this, governments are trying to raise awareness among the general public for them to be wary of where to invest their hard-earned savings. Belgian authorities recently launched a website that cautions investors to diligently do background checks of startups that they’re interested in providing financial backings to, Cointelegraph reported.

The Federal Public Service (FPS) Economy observed that the rise in popularity of the crypto market caused an upsurge of criminal activities in the nascent industry. According to records gathered by the FPS, the amount that Belgian investors lost to crypto scams last year was 2.2 million euros ($2.5 million).

However, the FPS estimates this is but a fraction of the actual numbers as only 4 percent of crypto fraud cases are being reported to the agency. They evaluate that investors are losing around 130 million euros ($152 million) per year.

In an attempt to curb this new headache, the FPS Economy, along with Federal Services and Markets Authority (FSMA), launched a website called Too Good to Be True. The site encourages people interested in crypto investments to check the details of a project before fully committing to it. It also stressed out that many of these scams promise a large return of investment with little to no risk on the part of the investor.

Moreover, there’s a page on the site where people can send information about illicit companies if they happen to have encountered one, as well as a scanner that screens websites to know whether they received a fraud complaint. The site further cautions that even if a company didn’t get a hit using the screener, it doesn’t immediately grant it complete legitimacy.

Various governments are cracking down hard on these crypto scams. Canada and the United States implemented Operation Crypto-Sweep to weed out these fraudulent companies. Meanwhile, Australia Securities and Investment Commission has been given authority to take action against illicit initial coin offerings (ICO) if the bureau deems the company guilty of committing crypto crimes, even if its operations don’t necessarily “involve a financial product.”