- The AI trading platform doesn't let people withdraw or access their funds
- Coscoin looks like a pyramid scheme
UK police have issued a warning against investing in Coscoin, a cryptocurrency investment platform, following reports of fraud, BBC reported.
Users can’t access or withdraw their funds
Coscoin, which also goes under the names of Cosetek or simply Cos, promises people it can double or even triple their investments. The self-proclaimed "leading AI quantitative trading platform" is not letting people withdraw or access their funds, however, and this has been a fact since November last year.
In northeastern England alone, 78 people have reported a collective loss of £214,869 (around $274,000), with an average loss of just under £3,000 per person, police said.
The North East Regional Organized Crime Unit (NEROCU) issued a warning after numerous reports of fraud.
Just like a Ponzi scheme
According to police, the structure of Coscoin makes it look suspiciously close to a pyramid or Ponzi scheme, which is sadly not uncommon in the world of crypto. Apparently, the platform misled its users and sometimes used funds belonging to new customers to pay for older customers’ withdrawals, the classic definition of a Ponzi scheme.
It’s believed Coscoin is based in the US state of Washington. It appears to encourage existing users to recruit new ones, which is also in line with the workings of a pyramid scheme.
The victims speak
Among the victims is a former Nissan employee who quit his job to become a WhatsApp group administrator for a cryptocurrency app. He told BBC someone claiming to work for the fraudulent platform used him as "a puppet."
Inspector Paddy O’Keefe, head of the economic crimes unit, expressed the age-old adage that something which seems too good to be true probably is. He warned people to refrain from making further investments as there are many scams promising to recover one’s initial losses.
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