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Australian Crypto Scams in 2018 Totaled $4.3 Million

Australian Crypto Scams Reported in 2018 Totaled .3 Million

Australia has become well known for its big push towards endorsing both blockchain and cryptocurrency use, but like anywhere the country is prone to scams as recent figures just released have revealed, with over USD 4 million dollars lost to cryptocurrency scams in 2018.

However, it appears that the AUD 6.1 million lost to cryptocurrency scams last year was just the tip of the scamming iceberg according to a recent survey by the Australian Competition and Consumer Commission (ACCC). Scams covering all sectors totaled 378,000 reported in 2018, costing victims a huge AUD 489 million (approx. USD 344 million).

The figure alarmed many of the government agencies responsible for taking in scam reports over the year due to an increase of 41.7% over the previous year 2017, although it is unlikely that the figures represent the actual extent to which Australian consumers have been duped. “These record losses are likely just the tip of the iceberg. We know that not everyone who suffers a loss to a scammer reports it to a government agency,” ACCC Deputy Chair Delia Rickard said.

In terms of cryptocurrency scams, there were 674 reported in 2018; a 190% increase compared to the AUD 2.1 million reported to Scamwatch in 2017. The most heavily used scams were those based on cryptocurrency investments which represented over double all cryptocurrency scams combined. However, the ACCC report indicated that the rising occurrence of scams concerning crypto had risen in tandem with the rising popularity of cryptocurrency in general since 2017.

In general, hacking scams featured high on the list of consumers losses with a 49% increase in reports, and shopping scams appeared to be becoming more popular with scammers, targeting consumers with shoes, Apple and Samsung phones, puppies, and cars as a means to duping them and relieving them of their money.


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 2017 Bad Year for Aussie Crypto Scams as US Launches ‘Cryptosweep’

The Australian Competition and Consumer Commission (ACCC) announced on Monday that consumers lost more than USD 2.1 million to cryptocurrency scams last year, CoinDesk reported.

Of this figure, the ACCC reported, consumers lost approximately USD 100,000 per month between January and September of 2017. These losses increased in December to USD 200,000 when Bitcoin price rose to nearly USD 20,000, recording losses of more than USD 700,000. The commission noted that these figures showed a correlation between the number of scams and the price of Bitcoin.

The common cause of consumer losses was due to scams involving fake ICOs, cryptocurrency pyramid schemes, and ransomware payments.

Although the figure is high, it was noted that scams overall last year Australians lost more than USD 340 million, with USD 64 million being lost to investment scams specifically last year.

Cryptocurrency fraud is by no means limited to Australia, with fraud occurring in all countries which have a crypto market. In North America, seven scams and hacks last year netted around USD 490 million of consumer funds for the criminals. The Wall Street Journal has reported that of the 1,450 ICOs it reviewed, 271 had “red flags that include plagiarized investor documents, promises of guaranteed returns and missing or fake executive teams”.

The North American Securities Administrators Association (NASAA) has launched its own task force to attempt to clean up the crypto space in the US and Canada, primarily by conducted thorough investigations of ICOs and cryptocurrency related products, according to CoinDesk.

The investigation, labeled ‘Operation Cryptoweep’ according to statements, has involved to date “nearly 70 inquiries and investigations and 35 pending or completed enforcement actions since the beginning of the month”.

The Texas State Securities Board (TSSB) conducted its own survey on cryptocurrency crime recently in an investigation involving 32 cryptocurrency investment plans over four weeks.  The report indicated that almost two-thirds of these promoters did not give investors a physical address and that five out of the 32 promoters did not disclose any investment risks, as well as the risk of cybersecurity threats and hacks, and instead simply promised gains of up to 40% every month.

Joseph Rotunda, the TSSB’s Enforcement Division director, commented that “the market for cryptocurrency investments is saturated with widespread fraud, and our work is only revealing the tip of the iceberg”.


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