By Chibuike Nkwede
A United Kingdom-based cryptocurrency investment company that promised investors returns of up to 100 per cent has been shut down after investigators found no evidence that it carried out genuine cryptocurrency trading.
Key Coin Assets Ltd was wound up by the High Court in London on August 11 following an investigation by the Insolvency Service.
Nine investors are reported to have lost more than £300,000 collectively after investing in the company.
The firm had reportedly promised investors guaranteed returns ranging from 40 per cent to 100 per cent. One of its online promotions advertised the offer with the slogan, “0 Fees, 0 Risks.”
However, investigators found that the company’s activities displayed several characteristics associated with a Ponzi-style investment scheme.
Money paid into the company by new investors appeared to have been used to pay earlier investors rather than being invested in legitimate cryptocurrency trading.
Investigators said they found no evidence that the company carried out genuine crypto trading as represented to investors.
Instead, funds deposited by investors were allegedly transferred into the personal bank account of the company’s director, in some cases within hours of being received.
Bank records reportedly showed that funds were frequently moved to the director’s personal account on the same day they entered the company’s accounts, after which the money became difficult to trace.
The company also allegedly published fake customer testimonials online without the permission of the individuals whose identities were used.
Investigators further found that investors were instructed to avoid using words such as “crypto” or “investment” when making bank payments.
The Insolvency Service said the instruction appeared to have been intended to avoid scrutiny of the transactions.
Key Coin Assets Ltd also failed to provide accounting records when requested by investigators.
The company reportedly changed its registered address several times, including to a residential flat whose occupants told investigators they had never heard of the business.
Further concerns were raised over the company’s financial filings.
Companies House records reportedly claimed that Key Coin Assets had assets worth as much as £42 million, although investigators said the company’s actual banking activity did not appear to support the scale of assets declared.
Following the winding-up order, the Official Receiver was appointed as liquidator of the company.
Authorities have warned members of the public to exercise caution when considering cryptocurrency investment opportunities, particularly schemes offering unusually high or guaranteed returns.
Prospective investors have been advised to verify whether an investment firm is authorised before transferring money and to check its regulatory status through the Financial Conduct Authority’s official channels.
Consumers have also been warned to be cautious of schemes that promise guaranteed high returns, ask investors to use unusual payment references or encourage them to recruit other people into the investment.
The case highlights the risks associated with cryptocurrency investment schemes that promise exceptionally high returns while providing little or no evidence of genuine trading activity.
Authorities are urging prospective investors to conduct proper checks, verify the credentials of investment firms and remain sceptical of any offer presented as high-profit and risk-free.
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