Key Coin Assets Ltd promised investors returns of up to 100%, but an investigation found no evidence of genuine crypto trading

A UK crypto investment company that promised investors returns of up to 100% has been wound up after an Insolvency Service investigation found no evidence that it carried out genuine cryptocurrency trading, with nine investors losing more than £300,000 between them.

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Key Coin Assets Ltd was wound up at the High Court in London on Tuesday, August 11, following action by the Insolvency Service, according to the UK Home Office.

The company had marketed investment opportunities offering guaranteed returns ranging from 40% to 100%, while one online advertisement promoted the offer with the words “0 Fees, 0 Risks”.

Investigators found that money paid by newer investors appeared to have been used to pay earlier investors, a pattern the Insolvency Service described as having the hallmarks of a Ponzi-style scheme.

Mark George, Chief Investigator at the Insolvency Service, said the investigation found no evidence that investors’ money had been used for the crypto trading they were promised.

“Key Coin Assets Ltd promised guaranteed returns but delivered nothing. Their behaviour displayed all the hallmarks of a Ponzi-style scheme,” George said.

“Investors were told their money was being invested in crypto, but our investigation found no evidence of any genuine trading at all.”

The investigation found that funds deposited into the company’s bank account were often transferred into the director’s personal account on the same day they arrived. Investigators said the money subsequently became difficult to trace.

The UK crypto firm also allegedly published fake customer testimonials online without permission and instructed investors to avoid using terms such as “crypto” or “investment” when making bank payments.

The Insolvency Service said the instruction appeared to have been intended to reduce scrutiny of the transactions.

Investigators also found that Key Coin Assets Ltd failed to provide accounting records when requested.

The company’s registered address was changed several times. At one point, investigators visited a flat whose occupants reportedly told them they had never heard of the business.

There were also discrepancies between information contained in company filings and the financial activity uncovered during the investigation.

According to the Insolvency Service, Companies House filings claimed that Key Coin Assets Ltd had assets worth as much as £42 million, although its actual banking activity did not appear to support that figure.

The Official Receiver has now been appointed as liquidator of the company.

George urged prospective investors to exercise particular caution when confronted with offers promising unusually high or guaranteed returns.

“We would urge anyone considering a similar offer to check whether a firm is registered before handing over their money, and to be deeply sceptical of anyone promising guaranteed returns with no risk,” he said.

The warning comes as UK authorities continue to highlight the risks associated with online investment schemes, particularly those promoted with promises of unusually high returns.

The Financial Conduct Authority advises consumers to check whether a financial firm is authorised and has the appropriate permission before investing. Its Firm Checker can be used to verify a firm’s status and permissions.

The regulator has also warned that online trading scams can initially provide apparent returns to encourage investors to commit more money or introduce other people before the scheme eventually collapses.

For crypto investments, the FCA advises consumers to check the Financial Services Register and to be cautious if a company cannot be found or does not have the appropriate permission.

The FCA further warns that get-rich-quick and Ponzi-style schemes can appear profitable in their early stages because early participants may receive returns, encouraging them to attract additional investors and money.

The collapse of Key Coin Assets Ltd therefore highlights a fundamental risk for investors: an attractive return is not evidence that an investment business is legitimate.

The Insolvency Service and FCA have urged prospective crypto investors to be particularly wary of guaranteed high returns, requests to avoid normal payment references and schemes that encourage investors to recruit others.

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The latest case also reinforces the importance of independently verifying an investment company’s regulatory status before transferring funds, particularly when an offer appears unusually lucrative or claims to carry no risk.