Australian regulator explains how to spot a crypto scam

Rick Steves

“When Australians fall victim to scams the cost is often more than purely financial. Scams cause emotional stress and can impact relationships.”

Australia’s Big Four banks risk losing AUS$13 billion

The Australian financial watchdog has released a statement, in support of Scams Awareness Week, that warns retail investors of the key signs of a crypto scam.

Scams Awareness Week is an annual campaign that aims to reduce the impact of scams by helping consumers identify and avoid scams.

Fake crypto apps, fake crypto tokens and jobs, and payment scams

The Australian Securities and Investments Commission said crypto scams fall into three broad categories, including:

  • scams where you think you’re investing in a genuine asset but it’s a fake crypto exchange, website or app;
  • fake crypto tokens (used to steal your crypto assets), and jobs trading crypto that look legitimate at first glance (but are really money laundering using crypto); or
  • scams that use crypto-assets to make a payment.

ASIC Deputy Chair Sarah Court said: “Australians lost more than $701 million to investment scams in 2021, up 135% from the previous year and these scams are continuing to increase. The main driver of the increase was cryptocurrency investment scams, where losses increased by 270%. The ACCC have advised that losses to crypto scams have increased further in 2022. Given this concerning trend, we want to arm Australians with the information they need to protect themselves from scammers.”

ASIC investigators have identified the the top 10 signs of a likely crypto scam:

  • You receive an offer out of the blue
  • You see a celebrity advertisement that is actually a fake
  • A romantic partner you only know on-line asks for money in crypto
  • You get pressured into transferring crypto from your current exchange to another website
  • You’re asked to pay for a financial service with crypto
  • The app you’re using or directed to isn’t listed on the Google Play Store or Apple Store
  • You need to pay more to access your money
  • You are ‘guaranteed’ returns, or free money
  • Strange tokens appear in your digital wallet
  • The provider withholds investment earnings ‘for tax purposes’

Sarah Court, ASIC’s Deputy Chair, also gave advice on what to do when consumers get scammed.

“If you think you’ve been the victim of a crypto scam, it’s important to act quickly. Draw a line under it. Don’t send any more money. Block all contact from the scammer. Do not delay. Contact your bank or financial institution immediately to report the scam. Ask them to stop any transactions. Also, warn your family and friends so they can watch out for potential follow-up scams. When Australians fall victim to scams the cost is often more than purely financial. Scams cause emotional stress and can impact relationships”, said the regulator’s Deputy Chair.

Read this next

Retail FX

Malaysia regulator exposes OctaFX clone, shady FB profiles

Malaysia’s financial regulator today warned online investors about the risks of following investment tips made on social-media platforms.

Digital Assets

Crypto trading volume spikes at Swiss bourse amid FTX collapse

The shockwaves from the historic collapse of Sam Bankman-Fried’s crypto empire are still being felt across the industry, but some trading venues are actually doing better because of it.

Executive Moves

CMC Markets adds Camilla Boldracchi to institutional sales

UK’s biggest spread better, CMC Markets has promoted Camilla Boldracchi to take on an expanded role within its institutional sales desk.

Institutional FX

FXSpotStream reports $1.48 trillion in monthly volume for November

FXSpotStream’s trading venue, the aggregator service of LiquidityMatch LLC, reported its operational metrics for November 2022, which moved higher on a yearly basis but reflected weak performance across executed trade volumes when weighed against the figures of the prior month.

Retail FX

Interactive Brokers’ client activity drops 30% YoY

Interactive Brokers LLC (NASDAQ:IBKR) saw 1.95 million daily average revenue trades, or DARTS, in November 2022 compared to 1.96 million transactions in the prior month.

Digital Assets

The rise of Crypto ETPs in traditional exchanges as crypto winter deepens

Institutional investors are increasingly looking at traditional regulated exchanges as their first route into digital assets amid market turmoil caused by the crypto winter and the collapse of several big names within the space, including FTX. Acuiti and Eurex surveyed 191 buy and sell-side firms on their views of the digital assets markets in order […]

Digital Assets

TP ICAP’s crypto arm receives FCA’s go-ahead

UK interdealer broker TP ICAP has received a regulatory go-ahead to launch its cryptocurrency services in the UK. The bid shows that the recent collapse of FTX exchange has done little to damp the interest of big names in running their own crypto business.

Industry News

Coin Signals founder to pay $2,847,743 after prison sentence over crypto Ponzi scam

The U. S. District Court for the Southern District of New York has ordered Jeremy Spence, founder of Coin Signals, to pay $2,847,743 in restitution to victims of a fraudulent virtual currency scheme.

Digital Assets

CME Group goes DeFi: Reference rates and real-time indices of Aave, Curve, Synthetix

“These rates are designed to provide traders, institutions and other users transparency and price discovery across a much broader range of tokens, allowing them to confidently and more accurately value cryptocurrency sector specific portfolios and manage price risk around various blockchain-based projects.”

<