Crypto Recovery in Australia
Crypto Scam Cases in Australia
Cryptocurrency, or ‘crypto’, is a decentralized digital money that has gained popularity and value in recent years. The Australian Tax Office estimates up to 600,000 Australians have invested in ‘crypto-assets’. However, this new and exciting technology also comes with risks and challenges, especially for unsuspecting investors who may fall victim to scams and frauds.
Here we will look at some of the common types of crypto scams that are targeting Australians, as well as other types of scams that are prevalent worldwide. We will also explain how they work, and what you can do to protect yourself and your money.
Fake Crypto Trading Platforms
One of the most prevalent crypto scams involves fake or cloned websites and apps that pretend to be legitimate crypto trading platforms or brokers. These scammers lure investors with attractive offers, such as shares in popular companies or new crypto projects, and convince them to deposit money into their accounts.
However, once the money is transferred, the scammers either disappear or demand more payments from the victims, claiming that there are technical issues, fees, taxes, or other reasons that prevent them from withdrawing their funds. In some cases, the scammers may also manipulate the fake platform to show false profits or losses, or ask the victims to install malware or provide personal information that can be used for identity theft.
For example, a Queensland couple lost more than $110,000 to a scam that involved a fake website and app that cloned the name and address of an Irish brokerage firm called Druid ICAV. The scammers offered the couple shares in Airbnb and a major cryptocurrency exchange and used a fake investment platform that mirrored real-time events. The couple was unable to withdraw their money and eventually realised they had been scammed when they contacted the real Druid ICAV.
Fake Crypto Wallets
Another common crypto scam involves fake apps that pose as crypto wallets. A crypto wallet is a phone application that allows users to send and receive different types of cryptocurrencies on their devices. Because cryptocurrencies are digital, they are not stored physically, but rather recorded and stored on the blockchain, which is a series of codes that acts as a ledger for every transaction.
However, not all crypto wallets are safe and secure. Some scammers create fake apps that look like legitimate wallets, but instead of connecting to the blockchain, they steal the users’ funds or private keys. A private key is a secret code that allows users to access their crypto assets on the blockchain. If a user loses their private key or gives it to someone else, they may lose access to their crypto assets permanently.
For example, a Canberra engineer lost about $5,000 to a scam that involved a fake app called WalletConnect. WalletConnect is a legitimate company that does not offer a phone app, but rather a protocol that allows users to connect their wallets to different applications. However, there was a fake WalletConnect app available on the Google Play Store at the time the engineer was looking for a wallet. The app carried the actual company’s logo and had a rating of 4.5 stars. The engineer downloaded the app and scanned a QR code to connect his wallet to another application. However, instead of connecting his wallet, he gave his private key to the scammers who then drained his funds.
Other Types of Crypto Scams
Besides fake trading platforms and wallets, there are other types of crypto scams that are common around the world. Some of them include:
These scams involve scammers who claim they have embarrassing or compromising personal information about the victim, such as photos or videos. They threaten to make the information public unless the victim pays them a ransom in crypto.
These scams involve scammers who offer the victim a chance to invest in a lucrative crypto project or scheme with promises of high returns or profits. They may also claim to have insider information or access to exclusive deals. However, once the victim sends them money or crypto, they either disappear or ask for more payments.
These scams involve scammers who artificially inflate the price of a low-value or obscure cryptocurrency by spreading false or misleading information about it on social media or other platforms. They then sell their holdings at a high price before the market crashes, leaving unsuspecting investors with worthless coins.
These scams involve scammers who pretend to be celebrities, influencers, or reputable organisations who are giving away free crypto or other prizes. They ask the victim to send them a small amount of crypto first as a verification fee or donation before they can receive their reward. However, they never send anything back
These scams involve scammers who create fake profiles on dating apps or websites and establish romantic relationships with their targets. They then ask for money or crypto for various reasons, such as travel expenses, medical emergencies, or investments. They may also ask for personal or financial information that can be used for identity theft.
How to Avoid Crypto Scams
Crypto scams are becoming more sophisticated and widespread as cryptocurrency becomes more mainstream and accessible. However, there are some steps you can take to avoid falling prey to these scams and protect your hard-earned money.
Do your research before investing in any cryptocurrency project or platform. Check the legitimacy and reputation of the website, app, company, or broker you are dealing with. Look for reviews, ratings, testimonials, contact details, and official social media accounts. Verify the domain name and address of the website or app you are using. Beware of unsolicited offers, promises of high returns, or pressure tactics.
Use a secure and reputable crypto wallet to store your crypto assets. Choose a wallet that supports the type of cryptocurrency you want to use and has features such as encryption, backup, recovery options, and customer support. Do not download or install any apps from unknown sources or links. Do not share your private key or password with anyone or enter it on any website or app that you do not trust.
Be careful when sending or receiving cryptocurrencies. Always double-check the address and amount before confirming any transaction. Do not scan any QR codes or click on any links that you do not recognise or trust. Do not send any money or personal information to anyone who claims to be from a crypto company or platform without verifying their identity and authority.
Report any suspicious or fraudulent activity to the relevant authorities and platforms. If you suspect you have been scammed or hacked, contact your bank, wallet provider, crypto exchange, or law enforcement as soon as possible. You can also report any scams to Scamwatch or the Australian Cyber Security Centre. You may also want to seek legal or financial advice if you have suffered significant losses or damages.
Cryptocurrency is an exciting and innovative technology that has the potential to transform the way we exchange value and information. However, it also comes with risks and challenges that require caution and vigilance. By being aware of the common types of crypto scams and how to avoid them, you can enjoy the benefits of cryptocurrency without falling victim to fraudsters and cybercriminals.
