An Australian Competition and Consumer Commission (ACCC) report discovered that many Australians were victimized by cryptocurrency scams in 2017, with an estimated AU$2.1million in losses obtained by those chasing the digital currency dream.
The ACCC said in its report that the impact on Australians where cryptocurrencies were concerned grew equal to the “value” and popularity of the likes of bitcoin in the last quarter of 2017.
“Scammers adapt each year and find ways to exploit popular trends, new platforms, new ways of communicating, fad products, changes to legislation, or new investment opportunities,” the ACCC report said.
A total of AU$100,000 was apparently lost per month to crypto-related scams between January and September 2017. However, in December 2017, reported losses exceeded AU$700,000 according to Scamwatch, an ACCC-run scam notice website.
The ACCC also reported that the average reported loss went up from AU$1,885 in January to AU$13,205 in December last year.
“As the value of actual cryptocurrencies increased, so too did the scam losses in what people thought were real investments,” the report continued. “By the end of the year, reports of losses related to cryptocurrencies exceeded AU$2.1 million but as with other scams, this is likely the very tip of the iceberg,” the ACCC said.
According to the Australian watchdog, one of the most common examples of cryptocurrency scams in 2017 included fake initial coin offerings (ICOs), claiming to be the launch a new digital currency.
Other scams, as per the ACCC, exploited the general confusion on how cryptocurrency works and rather than gaining knowledge on how to buy cryptocurrencies directly, many people found themselves trapped in what essentially were ‘pyramid schemes’.
“A number of reports showed that victims entered into cryptocurrency-based scams through friends and family who convinced them they were onto a good thing, a classic element of pyramid schemes,” the watchdog reported.
The ACCC reported that Australians lost a total of AU$340 million to scammers in 2017—the highest recorded loss.
Over 200,000 scam reports were submitted to the ACCC, the Australian Cybercrime Online Reporting Network (ACORN), and other federal and state-based government organizations last year.
Investment scams recorded the highest losses at AU$64 million while dating and romance scams were next at AU$42 million.
“Some scams are becoming very sophisticated and hard to spot. Scammers use modern technology like social media to contact and deceive their victims. In the past few years, reports indicate scammers are using aggressive techniques both over the phone and online,” Delia Rickard, ACCC Deputy Chair, said.