Crypto-Related Scams Cost Australians $2.1M AUD In 2017

Crime, News | May 21, 2018 By:

The Australian Competition and Consumer Commission (ACCC) has reported that over $2.1 million AUD ($1.5M USD) were lost in crypto-related scams last year.

In its annual report on scams, the consumer watchdog revealed that between January and September 2017, about $100,000 AUD ($75,000 USD) was reported lost per month to crypto-related scams. However, in December 2017, reported losses to Scamwatch, the ACCC-run scam notice website, exceeded $700,000 and the average reported loss had jumped from $1,885 AUD ($1,419 USD) in January to $13,205 AUD ($9,938 USD).

“As the value of actual cryptocurrencies increased, so, too, did the scam losses in what people thought were real investments,” the report said. “By the end of the year, reports of losses related to cryptocurrencies exceeded $2.1 million. But as with other scams, this is likely the very tip of the iceberg.”

Examples of cryptocurrency scams in 2017 include fake initial coin offerings (ICO). Others capitalized on the general confusion about how cryptocurrency works, and instead of people discovering how to directly buy cryptocurrencies, many found themselves caught up in what were essentially pyramid schemes.

The AU$2.1 million, however, is only a fraction of the AU$340 million ($256M USD) total that was stolen by scammers throughout 2017. Investment scams had the highest losses, with reports to Scamwatch and ACORN exceeding $64.6 million AUD ($48.6M USD).

“It’s very worrying that Australians are losing such extraordinary amounts to scammers,” ACCC deputy chair Delia Rickard said in a statement. “Based on just the reports provided to the ACCC, victims are losing an average of $6,500. In some cases, people have lost more than $1 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.”

Earlier this year, the ACCC said it received over 1,200 complaints about crypto-related scams in 2017.