Crypto Scams in Australia
Cryptocurrencies, or ‘crypto’, are decentralised digital currencies that can be used to buy goods and services, store value, or trade on online platforms. There are more than 10,000 cryptocurrencies in use around the world, and some of them have increased in value dramatically over the past few years. However, crypto is also a very high-risk and volatile investment, with no guaranteed returns and no regulatory protection. Crypto can be sent overseas quickly with limited oversight, making it an attractive target for scammers who want to exploit unsuspecting investors.
According to the Australian consumer watchdog, crypto scams surged by 172 per cent in 2021, with Australians losing more than $109 million between January and November of that year. The Australian Federal Police say that crypto scams ave ‘exploded during the coronavirus pandemic, as more people work from home and look for alternative ways to make money. Crypto scams are run by global syndicates, and the money trail is murkier than ever.
There Are Three Main Types of Crypto Scams that Australians Should Beware
These may mimic a real online exchange or wallet, but they are designed to steal your login details, lock you out of your account, or disappear with your money. They may also offer you fake investment opportunities or tokens that are worthless or do not exist.
These may involve selling you a fake product or service that claims to use crypto technology, such as a mining device, a trading bot, or a software update. They may also offer you a work from home job that requires you to purchase or trade crypto, but in reality you are laundering money for criminals.
These may involve scammers posing as legitimate entities, such as government agencies, utility providers, online retailers, or romantic partners. They may ask you to pay them in crypto for various reasons, such as taxes, fees, fines, bills, gifts, or donations. They may also threaten you with legal action or blackmail if you do not comply.
How to Avoid Crypto Scams
If you are interested in investing in crypto, here are some tips to reduce the risk of falling victim to a crypto scam:
Before you buy or trade any crypto asset, make sure you understand what it is, how it works, and what are the risks involved. Check the official website and social media accounts of the crypto project or platform, and read the document describing the crypto asset (sometimes called a ‘White Paper’). Look for online reviews and feedback from other users and experts. Be wary of unsolicited offers, recommendations, or endorsements from strangers or celebrities.
Before you use any crypto service or platform, make sure it is legitimate and secure. Check the URL and look for signs of encryption (such as a padlock icon or the https prefix). Avoid clicking on links or downloading attachments from unknown sources. If you receive a phone call or a message from someone claiming to be an investment manager or a customer support agent, do not give them any personal or financial information. Instead, contact the service or platform directly using their official channels.
If something sounds too good to be true, it probably is. Crypto is a very volatile and unpredictable market, and there are no guaranteed returns or ‘free’ money. Be skeptical of any claims that promise high profits with low risk or minimal effort. Do not let anyone pressure you into making a decision or transferring money quickly. Do not invest more than you can afford to lose.
If you buy or trade crypto, you need to store it in a digital wallet that only you can access. There are different types of wallets available, such as online wallets (also called hot wallets), offline wallets (also called cold wallets), hardware wallets (such as USB devices), or paper wallets (such as printed QR codes). Choose a wallet that suits your needs and preferences, and make sure you keep your private keys and passwords secure. Do not share them with anyone or store them online. Backup your wallet regularly and update your software when needed.
What to Do if You Are Scammed
If you think you have been scammed by a crypto-related scheme, here are some steps you can take:
Contact the service or platform where you bought or traded your crypto and inform them of the incident. They may be able to help you recover your funds or block the scammer’s account. You should also report the scam to Scamwatch , which is run by the Australian Competition and Consumer Commission (ACCC). This will help them track and stop the scammer’s activities and warn other potential victims. You can also report the scam to the Australian Cyber Security Centre, which can provide you with advice and assistance on how to protect yourself online.
If you have lost a large amount of money or are feeling distressed by the scam, you may need professional or emotional support. You can contact the National Debt Helpline or ring them on 1800 007 007 for free and confidential financial counselling. You can also contact Lifeline on 13 11 14 for 24/7 crisis support and suicide prevention services.
Scammers are constantly evolving their tactics and techniques, so it is important to stay informed and vigilant. Learn from your experience and share it with others who may benefit from it. Educate yourself on how to spot and avoid crypto scams, and do not let scammers discourage you from pursuing your financial goals.
Crypto is an exciting and innovative technology that has the potential to transform the way we exchange value and information. However, it also comes with significant risks and challenges that require careful consideration and due diligence. By being aware of the common crypto scams and how to avoid them, you can protect yourself and your money from fraudsters and enjoy the benefits of crypto safely and responsibly.
