The Financial Conduct Authority opened over 300 cases related to crypto firms in a six-month period last year and has 50 live investigations, including criminal probes, into companies in the sector.
The FCA, in common with regulators around the world, is being forced to take on an explosion of scams and unauthorised companies in the newly-mainstream crypto world.
The watchdog's ScamSmart website received 4300 reports of potential crypto scams in the six months to September 2021. The second most common category of scam reported was pension transfers, with 1600 reports.
The FCA still has limited oversight of crypto firms, restricted to closing unsupervised companies based in the UK and ensuring compliance with AML rules.
In total, the FCA received 16,400 enquiries about possible scams, up nearly a third on the same period the previous year. The regulator also stopped a quarter of applications from firms wanting to join the consumer investment market, up from one in five in the last financial year.
Sarah Pritchard, executive director, markets, FCA, says: "Consumers need to have confidence when making investment decisions and the data we’ve published today shows how prevalent scams can be.
"Before investing, check you know who you are really dealing with, check if they are authorised by the FCA and do your research to understand the risks that might be posed."