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Bitcoin bandits take advantage of crypto hype as scams escalate

Jessica Yun
·2-min read
closeup of golden bitcoin coin with digital pixel glitch error effect and silver and yellow reflection on its surface, scam or hacker attack concept in cryptocurrencies
Cryptocurrency scammers are getting worse. (Source: Getty)

Australia’s corporate watchdog has warned of a rise in fake cryptocurrency schemes as Aussies continue to lose their valuable digital currencies to scammers online.

In the month of March, three in four investment scams reported to the Australian Securities and Investments Commission (ASIC) related to cryptocurrency scams, a spokesperson told Yahoo Finance.

While ASIC has been aware of these types of scams for a long time, the latest figures mark a dramatic escalation in the volume.

“Just over the last little while, we have received a significant number of complaints about cryptocurrency scams,” ASIC commissioner Cathie Armour said recently at a Blockchain Week 2021 event.

"We know that this is probably a concern as much to all of you who participate in the industry as it is to us.”

Retail investor interest in cryptocurrency investment has risen in recent months as record-high prices make headlines. Dogecoin, in particular, received a significant boost after ‘4/20’ day, before losing about a quarter of its market cap.

The volatility of crypto prices have led experts to warn newbie investors to exercise caution.

The watchdog issued a scam warning in June last year, with reports of crypto scams up 20 per cent between March to May 2020 compared to the same period last year.

In fact, most advertised cryptocurrency “investment opportunities” were in fact scams, ASIC said – and money that is lost most likely won’t be recouped.

“Offenders are difficult to catch and money lost on bitcoin scams can be difficult to recover, especially when offenders operate outside of Australia and all contact has been online,” ASIC said.

Scammers aren’t just after your money – they’re after your personal details too, for the purposes of identity theft, the watchdog said.

Here’s how to spot a crypto scam

Victims tend to be called or emailed by a scammer, or approached by an acquaintance of theirs telling you they made money online and suggesting you do the same.

The victim is then told to sign up to an online ‘crypto-asset trading’ platform and told to deposit money into a trading account through a crypto wallet or bank account… and then encouraged to deposit even more money.

When the victim logs into their account, they might believe that they’re making profits, because what they’re looking at is fake data – but they’re later shown ‘trade losses’, even though there’s no trading happening.

And if the victim wants out, and seeks to withdraw funds, the scammers either cut all contact or demands for more payment to release the funds.

If you think you’ve been scammed, you can lodge a report of misconduct with ASIC and also report it to Scamwatch.

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