Court winds up Key Coin Assets after £300,000 loss

The U.K. government said on Aug. 18 that the High Court had ordered Key Coin Assets Ltd wound up a week earlier and the Official Receiver was appointed liquidator. The Insolvency Service carried out the investigation.

Nine people who reported the firm to Action Fraud paid more than £300,000 between them, the Insolvency Service found. Investigators were unable to locate records of genuine crypto trading that matched the company’s promotional claims. The firm had told investors it could deliver returns of 40% to 100% and one online promotion said “0 Fees, 0 Risks.” Mark George, Chief Investigator at the Insolvency Service, described the firm’s conduct as showing ‘all the hallmarks of a Ponzi-style scheme.’

Bank statements reviewed by investigators showed customer payments were often moved into the director’s personal account on the same day or within hours of receipt. After those transfers the money frequently could not be traced. Requested accounting records were not provided during the inquiry. Filings at Companies House claimed assets of up to £42 million, a total investigators found inconsistent with the firm’s actual banking activity. At one stage the company listed an address that turned out to be a private flat whose occupants had no connection to the business.

Investigators also found online customer testimonials that used names without permission and evidence investors were told not to include words such as “crypto” or “investment” in bank payment references. The Insolvency Service noted that the rapid transfer of funds into a director’s account and apparent recycling of payments between clients matched common features of a Ponzi-style operation.

The Financial Conduct Authority added Key Coin Assets to its list of unauthorized firms on Sept. 12, 2024. The regulator warned the firm was not authorised to operate in the U.K. and reminded consumers that dealing with an unauthorized firm does not bring protection from the Financial Ombudsman Service or the Financial Services Compensation Scheme.

The Insolvency Service and the FCA urged people considering crypto investments to check the FCA’s Firm Checker and its unauthorized firms list. They highlighted warning signs including guaranteed high returns, instructions to obscure payment references and pressure to recruit other investors.

The case comes while the U.K. finalises a new regulatory framework for crypto firms. The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 were finalised in February; firms can apply for authorisation from Sept. 30, 2026 and the full regime takes effect on Oct. 25, 2027. The FCA has also stepped up enforcement in the sector, including coordinated actions earlier in the year on premises linked to suspected illegal peer-to-peer crypto trading.

The government reports fraud cost individuals and businesses £14.4 billion in 2023-24 and has pledged more than £250 million between 2026 and 2029 to tackle fraud in its Fraud Strategy.