Australia warns of cryptocurrency “investment wolves” as scam losses soar

Cryptocurrency investment scams are now Australia’s second-most common fraud, says the country’s consumer watchdog.

This year so far, personal investors have lost an average of $4.3m a month to fake investment scams, announced Australia’s Competition and Consumer Commission (ACCC). That’s up 117% on 2017, when the body reported that average losses per person had spiked from $2,000 to $13,000.

“The rise in popularity in cryptocurrency trading has not been missed by scammers who are latching onto this new trend to con people. These are similar to any other investment scam: the scammer will claim to have inside knowledge about price movements they will use to make you a fortune. If you invest, your money will quickly disappear,” ACCC Deputy Chair Delia Rickard said.

She added: “The losses to investment scams are horrific. These scams are very sophisticated and scammers are very convincing.”

Rickard noted that the people most at risk were aged between 45 and 64; those approaching pensionable age and looking for safe havens or good bets to boost their life savings.

Unintended crypto consquences

Australia is ahead of the game as regards cryptocurrency regulation, announcing in April that all cryptoexchanges must now register with the financial regulator AUSTRAC.

The country’s taxation office has specific guidance on where Bitcoin falls in regards to capital gains tax, and by July 2019 the country will ban all cash buys over $10,000 in a bid to curb money-laundering and tax fraud.

AUSTRAC CEO Nicole Rose has said that her department’s reforms have been welcomed by cryptocurrency businesses in Australia, with regulation helping to “strengthen public and consumer confidence in the sector”.

But official pronouncements on crypto seem to have opened the door to ever increasing scams on citizens.

Widely reported criticism of Bitcoin by Tony Richards, head of payments at Australia’s Reserve Bank, may have exacerbated interest in altcoins.

Fraudsters then move to take advantage by capitalising on frequent headlines to scam people out of their nest eggs, offering impossible gains for next-to-no risk.

The law of unintended consequences has struck again, it appears.

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