As cryptocurrency grows into a broader world of recognition and adoption, the scams related to them have also grown in equal measures. According to a report released by Australia’s Competition and Consumer Commission on April 29, the country has observed a 190% increase in cryptocurrency scams, wherein Australian consumers lose $6.1 million Australian dollars ($4.3 million) in 2018.
In comparison to AU$2.1 million ($1.48 million) loss in 2017, there has been a substantial rise despite the industry-wide slump in cryptocurrency prices. Reportedly, Australian authorities received 674 reports where crypto was used to pay scammers.
Most victims were targeted through investment scams, under which they were encouraged to purchase digital currencies or asked to make crypto payments for access to forex trading, commodity trading and other investment opportunities. The consumers only realized something was amiss when they unable to withdraw funds or contact the fraudster responsible, a total of AU$2.6 million ($1.8 million) was lost this way.
The Australian Competition and Consumer Commission (ACCC) report, almost half of all those who lost money to crypto scams were men aged 25 to 34. It was also noted that the true number of victims could also be much higher, as some may have been too embarrassed to come forward.
One such victim, who believed that they are given a trial task for a well-paid job, was pressured into converting money at bitcoin (BTC) ATMs and sending it to investors. As a fraud investigation took place, their bank accounts were henceforth frozen, the unnamed victim said:
“I’m cooperating with the bank and hope to get my accounts unlocked and my name cleared. It’s clear to me now that this was just a money laundering scheme and I fell for it.”
The ACCC urges consumers to be wary of unusual payment methods such as crypto, iTunes gift cards and remittance service, especially if the payment request appears to be coming from a government agency.
In March, an Australian crypto fund manager was taken to court by his clients over the loss of AU$20 million ($14 million). It is alleged Stefanos Papanastasiou had requested his clients to transfer money to his wife and sister and was unable to pay them back when they requested a withdrawal.