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Aussies slammed to the tune of $2.1 million in cryptocurrency scams

While cryptocurrency may be the latest way humans are creating wealth and paying for stuff, it seems this new system is still totally susceptible to one of the oldest means of robbing people – the humble scam.

And it turns out the amount that Aussies lost in crypto deals gone ‘wrong’ last year alone is substantially more than initially thought.

In February, it was reported Australians had seen $1.3 million go missing last year through Bitcoin and Ethereum-related scams.

However, that amount has since been updated to $2.1 million, with the Australian Competition and Consumer Commission warning even this amount “is likely the very tip of the iceberg”, with many people likely feeling a tad too bashful to actually report that they had been scammed.

“Examples of cryptocurrency scams in 2017 include fake ‘initial coin offerings’ which, like initial stock offerings, purport to be the launch of a new cryptocurrency,” the ACCC said in their annual scam report.

“Others capitalised 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.

“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 ACCC also noted that, by its very nature, cryptocurrency lends itself to being used in scams.

Specifically, because it is anonymous and can’t be traced, many scammers, extortionists and blackmailers use cryptocurrency as their preferred payment method.

The commission noted “Ransomware scammers for example, commonly ask for payment through Bitcoin”, which was the case with the Petya cyber attack in June of 2017, which famously attacked (among many others) the Cadbury chocolate factory in Tasmania, demanding $300 worth of Bitcoin to see their computer systems returned to their control.

About the author

Joe was Junior Vice-President at Compu-Global-Hyper-Mega-Net until it was bought out by Bill Gates. He now subedits for Conversant Media and considers it a step up.

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