On August 18, the UK government announced that a London court had liquidated the company Key Coin Assets Ltd the previous week. An investigation by the Insolvency Service – the UK government agency responsible for investigating corporate misconduct and insolvency matters – found no evidence that the company conducted any of the cryptocurrency trading it claimed in its advertising.
Nine people, who filed complaints with Action Fraud – the UK's national centre for reporting fraud and cybercrime – collectively paid the company more than £300,000.
Illegal investment schemes remain a real threat to UK savers, as the UK's full crypto regulatory regime is still over a year away. The company told investors it could guarantee returns of 40% to 100%, and one online advertising campaign claimed: "0 fees, 0 risk".
Mark George, Chief Investigator at the Insolvency Service, stated:
"Key Coin Assets Ltd promised guaranteed returns but delivered nothing. Their behaviour had all the hallmarks of a Ponzi scheme."
The Insolvency Service noted that funds from new investors appeared to be used to pay previous investors, rather than for any investments.
Funds Transferred to Director's Personal Account
Bank statements reviewed by investigators showed that client funds were often transferred to the company director's personal account within hours or on the same day they were received. The money then became difficult to trace, and the accounting records requested by the Insolvency Service were not provided during the investigation.
The company repeatedly changed its registered address, on one occasion listing a flat whose residents had never heard of the firm. Documents filed with Companies House stated assets of £42 million – a figure investigators believed was vastly disproportionate to the company's actual banking activity.
Fake customer testimonials appeared online without the permission of the people whose names were mentioned. Furthermore, investors were instructed to avoid terms like "cryptocurrency" and "investment" in bank payment descriptions.
According to the government's "Fraud Strategy for 2026-2029", fraud against individuals and businesses cost the UK economy £14.4 billion in 2023-2024 and is the most common crime in the country. Under this strategy, over £250 million is allocated to combat fraud between 2026 and 2029.
FCA Had Previously Issued a Warning About the Company
The Financial Conduct Authority (FCA) added Key Coin Assets to its list of unauthorised companies on September 12, 2024, nearly two years before the court order. The FCA warning regarding Key Coin Assets stated that the company was not authorised and may have been targeting UK consumers.
Anyone dealing with an unlicensed company is not protected by the Financial Ombudsman Service, which handles complaints about financial companies, or the Financial Services Compensation Scheme, which can pay compensation to customers if a licensed company goes bankrupt.
The regulator has also stepped up enforcement in other parts of the sector, including conducting raids on eight premises linked to suspected illegal peer-to-peer cryptocurrency trading. This operation in April was the first coordinated action of its kind and led to cease and desist orders as authorities investigated potential illegal activity.
What Investors Should Check Before Paying
The Insolvency Service and FCA strongly recommend that anyone considering investing in cryptocurrency check a company using the 'Firm Checker' tool on the FCA website and the list of unlicensed companies. Guaranteed high returns, requests to avoid using standard payment references when transferring funds, and pressure to recruit other investors are warning signs highlighted by both bodies.
A common red flag for cryptocurrency fraud is advertising unusually high returns with almost no visible risk. Investigators found precisely this combination in materials provided by Key Coin Assets to its clients.
Broader UK Crypto Rules Come into Force in 2027
Cryptocurrency companies conducting regulated cryptoasset activities in the UK will be subject to the FCA in the same way banks and brokers already are, under the 2026 regulations to the Financial Services and Markets Act 2000 (cryptoassets). According to the UK Treasury's policy paper on cryptoasset regulation, the final rules were approved in February 2026.
The final regulatory framework covers entities such as exchanges, custodians, staking providers, and lenders; the effective date – October 25, 2027 – is specified in the UK's final cryptoassets rulebook. Companies will be able to begin applying for permission from September 30, 2026, creating a transitional period before the broader rules take effect.
Additionally, in July, UK lawmakers launched an inquiry into crypto firms' access to banking services, questioning whether banks are de-banking legitimate crypto companies. The All-Party Parliamentary Group on Cryptocurrency and Digital Assets sent a letter to the heads of major banks on August 11 and is gathering evidence until August 31.
An official receiver – a public official who handles the affairs of companies liquidated by court order – has been appointed as the liquidator of Key Coin Assets under the High Court's order.
