Cryptocurrency scams have always been a pressing problem in this industry. However, it appears criminals have set their sights on Australia, resulting in over AU$700 million being lost to scams in 2022. That is more than 2021, and the year still has seven weeks.
Australia and Cryptocurrency Scams
It is not uncommon to encounter a cryptocurrency scam these days. Anything that looks too good to be true often is, regardless of the product or service involved. That also applies to new exchanges and trading platforms popping up. It is not too hard to create the allure of an exchange, but providing reliable trading infrastructure is a different ordeal.
Australia has seen its share of cryptocurrency scams over the years. It is one of the more prominent countries for crypto adoption, making it a prime target for hoodlums. In 2021, consumers and businesses in the country lost AU$701 million to fraudulent projects and scams. In 2022, that number was surpassed in late October, confirming the threat has become more omnipresent.
Figuring out ways to combat scams and theft remains a tricky ordeal. Consumers must step up their game to protect themselves from criminals and other nefarious individuals. ASIC, the Australian Securities and Investment Commission, issued a statement to highlight this pressing problem. Moreover, the agency offers a few common tips on how users can protect themselves.
ASIC identifies three main “categories” of cryptocurrency scams: fake investing/trading platforms, fake crypto assets for money laundering, and fraudulent payments. That latter may seem unusual, but cryptocurrencies offer a degree of privacy. So while their origin can be traced – in most cases – people wouldn’t go through the trouble of performing such an analysis and unknowingly accept “tainted” coins.
Due Diligence Is Crucial
The best way to avoid crypto scams is by maintaining a neutral and questioning outlook. Anyone trying to pressure you into doing something unusual often has nefarious intent. Celebrity advertisements and romance partners asking for crypto are best avoided. Paying to access your money is absolutely “not done”, especially with cryptocurrencies. These are just some of the tips ASIC extends to Australians today.
ASIC Deputy Chair Sarah Court adds:
“If you think you’ve been the victim of a crypto scam, it’s important to act quickly. Draw a line under it. Don’t send any more money. Block all contact from the scammer. When Australians fall victim to scams, the cost is often more than purely financial. Scams cause emotional stress and can impact relationships.”
Following the rise in cryptocurrency scams, more regulation seems likely in Australia. That said, addressing crypto investment scams is not a black-white approach. There is a fine line between legitimate and nefarious offerings. Even fake investment opportunities can appear legitimate and be linked to a company registration number. A radical change will be needed in Australia and beyond to put this threat to bed.
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