Australia's crypto regulation
Credits: BeInCrypto

Australian crypto scams surge by 162% resulting in huge losses

In recent years, the use of cryptocurrency has become increasingly popular worldwide, with more and more people investing in digital currencies such as Bitcoin, Ethereum, and Dogecoin. However, with the rise in the popularity of cryptocurrency, there has also been a surge in cryptocurrency scams. According to a recent report, Australian crypto scams have increased by over 162% in the past year, resulting in nearly $150 million in losses.

The report, which was released by the Australian Competition and Consumer Commission (ACCC), revealed that there were 2,200 reported cryptocurrency scams in Australia in 2021, up from just 900 in 2020. These scams included fake ICOs (initial coin offerings), fake crypto wallets, and fake investment schemes, among others.

Types of Cryptocurrency Scams in Australia

One of the most common types of crypto scams in Australia is the fake investment scheme. These schemes promise high returns on investment in a short amount of time, but in reality, they are just Ponzi schemes that rely on new investors to pay off old investors. Once the scheme runs out of new investors, it collapses, and investors lose their money.

Another popular type of Australian crypto scams are fake ICO. In this scam, scammers create a fake website and promote a new cryptocurrency, claiming that it is going to be the next big thing in the crypto world. They ask investors to buy the new cryptocurrency in exchange for a promise of future returns. However, once investors buy the cryptocurrency, the scammers disappear, and the investors are left with worthless coins.

Increase in Cryptocurrency Scams and Losses

Fake crypto wallets are another common type of scam. These scams involve scammers creating a fake cryptocurrency wallet and promoting it on social media or other online platforms. They convince users to transfer their cryptocurrency into the fake wallet, and once the funds are transferred, the scammers steal the funds and disappear.

The ACCC report also found that the average amount lost in cryptocurrency scams in Australia was $7,065, with the highest reported loss being $1.5 million. The most commonly reported cryptocurrency used in these scams was Bitcoin, followed by Ethereum.

Australian crypto scams surge by 162% resulting in huge losses
Picture Credits:

Concerns and Warnings from Regulators

The rise in Australian crypto scams is a concern for regulators and law enforcement agencies in Australia. The Australian Securities and Investments Commission (ASIC) has warned investors to be cautious when investing in cryptocurrency and to do their research before investing. They have also warned that cryptocurrency scams are difficult to investigate and prosecute due to the anonymity of transactions and the global nature of the crypto market.

Awareness Campaign and Response from Banks

The ACCC has also launched a campaign to raise awareness about cryptocurrency scams and to educate the public on how to identify and avoid them. The campaign includes a website with information on how to spot a crypto scam, as well as resources for victims of crypto scams.

In response to the increase in cryptocurrency scams, some Australian banks have also started to block transactions related to cryptocurrency trading. National Australia Bank (NAB) has banned customers from using their credit cards to buy cryptocurrencies, while Commonwealth Bank has stopped customers from buying cryptocurrencies using their debit cards.

In conclusion, the rise in cryptocurrency scams in Australia is a cause for concern for investors and regulators alike. As the crypto market continues to grow, it is important for investors to be cautious and to do their research before investing in any cryptocurrency. Regulators and law enforcement agencies must also continue to educate the public about the risks of cryptocurrency scams and to take action against those who perpetrate them.

Also Read: Microstrategy’s Michael Saylor has integrated his email addresses with Bitcoin lightning.