Crypto Scams Are Set to Increase… But What on Earth Are They?

In 2022, Australians have lost around half a billion dollars to scams. Over $300 million of this has been through investment and cryptocurrency scams. As Christmas nears, it’s feared that scams like these will ramp up, impacting even more Australians.

So, what exactly are cryptocurrencies?

Cryptocurrencies are digital tokens – a kind of digital currency that allows you to make payments directly to another through an online system. The most well-known cryptocurrencies are Bitcoin and Ethereum. Cryptocurrencies have no legislated or intrinsic value: essentially, they are only worth what people are willing to pay for them.

What does a cryptocurrency scam involve?

Most cryptocurrency scams involve getting a victim to buy and send cryptocurrency to another account. Usually, it will seem to be for a legitimate investment opportunity. As cryptocurrency is unregulated and untraceable, transactions can’t be reversed.

The Australian Securities and Investments Commission has released this list alerting people to the top ten signs of a likely crypto scam:

  1. You receive an offer out of the blue.
  2. You see a celebrity ad that is actually fake.
  3. A romantic partner you only know online asks for money in crypto.
  4. You are pressured into transferring crypto from your current exchange to another website.
  5. You’re asked to pay for a financial service with crypto.
  6. The app you’re using or directed to isn’t listed on the Google Play Store or Apple Store.
  7. You need to pay more money to access your money.
  8. You are “guaranteed” returns or free money.
  9. Strange tokens appear in your digital wallet.
  10. The provider withholds earnings for “tax purposes”.

ASIC Deputy Chair, Sarah Court, warns: “if you think you’ve been the victim of a crypto scam, it’s important to act quickly. Don’t send any more money. Block all contact from the scammer.”

When Australians fall victim to scams, the cost is not simply financial. Scams not only cause emotional stress, but they can also cause harm to your relationships.

It’s important that we educate ourselves and those around us to be vigilant, but also to remember that getting scammed isn’t your fault – scammers are criminals.