Bitcoin, Ripple and ethereum’s prices skyrocketed towards the end of 2017 leading legislators to create a series of regulations to safeguard investors from online trading scams.
Bitcoin had a value of just $954 in January last year but saw its price soar more than 1,500 percent throughout 2017 attracting the attention of hackers and online criminals – with experts warning about the potential risks of investing in unregulated cryptocurrencies.
Europol boss Rob Wainwright has called on international governments to create new laws to crack down on crypto criminals creating schemes exploiting the cryptocurrency craze to scam investors.
He said: “We need the help of regulators. We need the help of legislators particularly to crack down on these high-value investment scams and this trend of fool’s gold effectively that is offered to people as they seek to cash in on the bitcoin frenzy.
“Cryptocurrency schemes are just scams, perfect scams.”
Bitcoin hit highs of $20,000 in December but it took a plunge following an announcement by regulators across the world to crack down on the crypto world.
South Korea – one of the earliest countries to regulate crypto trading – has suggested taxing bitcoin profits and curbing anonymous transactions in an effort to tackle underage children and potential criminals from using the digital currency.
Mr Wainwright added regulation would also provide investors with the necessary information on whether to diversify their portfolios to include cryptocurrencies.
Speaking to the BBC Panorama programme, he continued: “Considering it’s not regulated there is no mean by which the investor can make an informed decision about whether it is safe to invest money in this.”
Bitcoin and other major cryptocurrencies like Ripple and ethereum are facing a crackdown by governments and banks in an effort to protect consumers and secure regulation.
Cryptocurrency technology currently allows users to make payments and store money on the internet without needing to use their name or a bank.
Lloyds Bank said they would apply a ban on customers buying bitcoin and other cryptocurrencies with their credit cards.
Other British banks are expected to follow suit over the coming weeks after several of the biggest US banks including JP Morgan, Bank of America and Citigroup all confirmed plans to block attempts to buy digital currencies.