Australians’ losses from investment frauds surged 90% to AU$103 million from the start of the year to March 20, with the Australian Competition and Consumer Commission (ACCC) confirming payments to fraudsters are most often carried out in cryptocurrency.
Consumer and Fair Trade Executive Managing Director Rami Greiss said that while the increase in the use of crypto follows its growing popularity, it has facets that lend themselves to being exploited by fraudsters.
“It’s also the fact that it’s an unregulated product, so there are no controls. There are no institutions that can be roped in to assist. So really, it’s the fact that it’s the wild west,” Greiss explained.
"In relation to scamwatch, we see a number of scams relating to investment schemes, and we are now seeing that the payments in relation to those are now more often by way of cryptocurrency than by way of bank transfer," Gina Cass-Gottlieb, the new president of the ACCC stated.
According to ACCC, it has received 66 reports of money recovery frauds this year on its website Scamwatch which is a 725 percent increase compared to the same period in 2021. The commission also disclosed that fraudsters target previous scam victims by contacting them and then posing as someone representing a trusted firm such as a law firm, fraud task force, or government agency.
Subsequently, the fraudsters ask victims to fill out fake paperwork or provide identity documents and seek upfront payments. They may request remote access to computers or smartphones, enabling them to scam their unsuspecting victims.
Earlier this year, the Australian government announced it would design a crypto badge of approval to licence intermediaries such as exchanges.
Last week, Australia’s Financial Services Minister Jane Hume stated that the license will include a "fit and proper person" test, and could include anti-hawking measures to prevent cold calling. Hume also explicitly ruled out a ban.
“Crypto values will go up and down sure as eggs, and the government will not be protecting consumers from market volatility—and nor should they,” she said. But Australian investors will be sure that if they use a licensed Australian exchange, they can trust the exchange will deliver on its commitments to customers and have appropriate protections.”
