Australians Lost Millions to Crypto Investment Scams

Significant technological progress over the past decade contributed to the increase in scams affecting Australians.

Australians lost $2.5 billion ($1.73 billion USD) to scams within the 10 years from 2009, claims the latest research from Scamwatch. Furthermore, the report reveals significant growth in a cryptocurrency investment scam.

The project is run by the Australian Competition and Consumer Commission (ACCC) and is dedicated to reporting scams. According to its data, the annual financial losses of Aussies have more than doubled since 2009 and reached nearly $143 million ($99 million USD) in 2019. This is 34% more compared to the data of 2018 when the total loss of scam victims was around $107 million ($74 million USD).

Investment scams

According to a report, investment scams were among the most popular types of scams that caused the biggest losses last year. Other profitable fraudulent activities included business email compromise and dating and romance deceits.

Furthermore, the financial damage caused by investment fraud in 2019 increased by 59% up to $62 million ($43 million USD) compared with $38.8 million ($26 million USD) in 2018. Reportedly, the investment scams that use “celebrity” endorsements contributed to significant individual financial losses.

Despite the fact that lots of scams remain the same as ten years ago, many of them adapted over time to use online services, social media, or new payment methods. Furthermore, the new scams like cryptocurrency investment scams or business email compromise have emerged. According to a report, these types of scams are now one of the most financially damaging scams for Australians.

In the meantime, the cryptocurrency investment scams alone caused over $21 million ($14.5 million USD) of financial damage last year. One of the most common types of included controversial cloud mining business:

Cloud mining farms became a common adaptation of this type of scam. Most were Ponzi schemes, with no real cryptocurrency involved.

Cloud mining is a kind of business that offers to rent a cryptocurrency mining service for a monthly fee. Differently from traditional crypto mining pools, cloud mining companies offer remote mining without a need to have your own mining hardware. The scammers meanwhile, use the same business model for deceits and offer the same service on non-existent mining hardware.

Although cryptocurrencies are common in investment scams, they are also often requested as a payment method by fraudsters. According to the report, the introduction of new payment methods was one of the biggest developments in scams within the past ten years. Moreover, the study revealed that Bitcoin has become the second most popular payment method after traditional bank transfers and the most popular cryptocurrency used in scams.

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