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UK Crypto “Academy” Shut Down After Investors Lost £5 Million

Last Updated May 14, 2024 1:53 PM
Shraddha Sharma
Last Updated May 14, 2024 1:53 PM

Key Takeaways

  • The UK High Court has shut down Amey Finance Academy Ltd. for misleading investors.
  • The government website underlines that the company failed to provide accurate financial records.
  • £5 million reportedly passed through the company’s account without clear accountability.

The London High Court shut down Amey Finance Academy Ltd. after investigations revealed financial mismanagement. The Insolvency Service led the closure after investors lost at least £5m through the company’s false promises of lucrative crypto investments.

The Financial Conduct Authority (FCA) mandates that all financial promotions are clear and not misleading. According to the regulator’s guidelines released in March, influencers and social media promotions are part of the framework.

What Led to Amey Finance Shutdown?

The Insolvency Service secured a  winding-up order against Amey Finance Academy Ltd, a company founded by Desmond Amey in 2018.

Amey Finance Academy offered financial education and cryptocurrency investment advice but false assurances led to investors losing money. The company also reportedly failed to keep accurate accounts, hindering the investigation into its financial activities.

On April 30, the High Court in London ordered the company to shut down. Desmond Amey, the sole director and shareholder, had promoted himself as a wealth creation expert, assuring clients that their cryptocurrency investments were secure. However, numerous complaints revealed that these investments were far from safe, and many customers suffered major financial losses.

Mark George, Chief Investigator at the Insolvency Service, criticized Desmond Amey for recklessly persuading individuals to invest in risky crypto schemes. He highlighted that the company’s promises of financial education and concierge services did not compensate for the losses incurred by customers.

One of the main issues identified was the company’s failure to provide adequate accounting records. An estimated £5m passed through the company bank account from October 2019 to March 2022.

How Amey Used Social Media 

Amey Finance Academy also promoted cryptocurrency schemes run by other companies, such as HyperFund. HyperFund raised over $1.7b from investors worldwide but faced warnings and investigations in the UK, New Zealand, and the US. The US Securities and Exchange Commission charged its founder with fraud in January 2024.

Meanwhile, Amey Finance Academy made several misrepresentations to lure investors. On social media, it claims to be a successful independent consultancy offering a wide range of financial services and running a top-tier education academy. 

Amey even assured one customer that their investment would not drop below 90%, only for them to lose all their money. In WhatsApp messages, Amey misleadingly told another customer that the investments were “100 certy” (certain) and urged to “trust me bro.”

Amey released a video on YouTube in October 2023, implying he still operated from 1 Canada Square, Canary Wharf in London. In reality, he had been evicted from this location for failing to pay rent earlier that year. 

The Financial Conduct Authority (FCA) classified Amey Finance Academy as an unauthorized provider of financial services in the UK.

FCA’s Recent Rules 

According to the FCA guidelines  released in March 2024, all financial promotions, including those related to crypto assets, must be fair, clear, and not misleading.

The guidelines are regardless of the communication channel. The rules also include ensuring that risk warnings are prominently displayed and that the promotions provide a balanced view of the benefits and risks involved.

The FCA underlined that firms must ensure that promotions are standalone compliant, meaning each communication must meet regulatory standards individually. 

FCA Crypto Promotion Guidelines
FCA Crypto Promotion Guidelines

When using social media, firms also need to consider the characteristics of the platform and the target audience. 

Additionally, firms are expected to actively monitor and manage their affiliate marketers, such as influencers, to ensure compliance with the financial promotion rules. 

Unauthorized individuals promoting financial services without proper approval may be committing a criminal offense under the FCA guidelines. 

Business Closure And Domestic Rules

The closure of Amey Finance Academy Ltd by the London High Court highlights the need for regulatory compliance in the financial sector, including cryptocurrency investments. Amey Finance lacked financial accountability and used misleading promotional tactics to lure investors

In response to cases like these, the FCA has reinforced its guidelines to ensure that financial promotions are fair, clear, and not misleading, regardless of the medium used.

Despite that, the Amey Finance debacle serves as a reminder of the importance of regulatory oversight. And because the consequences of failing to adhere to these standards can be dire. 

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