Cryptocurrencies today are deemed as a golden opportunity to make good money regardless the size of the investment. Sadly, lack of knowledge can also result in loss of money in cryptocurrency scams as per the report by the Australian Competition and Consumer Commission (aka ACCC). The country’s national consumer watchdog recently published an annual report on the money of Australian citizens lost by scams. The report says that Australian citizens have lost a total of AU$2.1 million to scams related to cryptocurrency.
The report is titled “Targeting Scams: Report of the ACCC on scams activity 2017”. It covers a lot of different areas in which the Australian citizens have lost their money to scams and provides plenty of detail for each sector. The report says that the scams grew in number as the cryptocurrency ecosystem’s value increased. Since the cryptocurrency ecosystem’s value was the largest during the last quarter of 2017, that was the time when cryptocurrency-related scams surged.
According to the report by the ACCC, only about AU$100,000 were lost to crypto scams per month from January to September. The money lost to crypto scams started growing in October and reached AU$700,000 in December 2017. This was the time when Bitcoin almost reached US$ 20,000 resistance level – all-time high for the cryptocurrency. According to these facts, approximately AU$900,000 were lost to crypto scams from January to September while the remaining AU$2.1 million were lost in just the next three months alone.
Many of the cryptocurrency scams that accounted for a huge portion of the total money lost in 2017 included fake ICOs (Initial Coin Offerings) where newbie investors were fooled to pay money to buy the first batch of coins of a cryptocurrency that never existed in actual.
Another method that accounted for a lot of lost money to cryptocurrency scams was pyramid schemes that take advantage of new members. Pyramid schemes are a huge problem in many countries around the globes and authorities are making extra efforts to shut them down. Chinese Police have also been working to shut down pyramid schemes in the country and have arrested 119 suspects recently who are suspected of being involved in a US$2.3 billion pyramid scheme.
As for the fake ICOs U.S. Securities and Exchange Commission (SEC) addressed the problem in a very creative manner. The SEC launched its own fake ICO to spread the knowledge about cryptocurrency scams. Anyone who would click to buy these fake coins would be redirected to a webpage that teaches people about red flags in token sales.
According to the report by the ACCC, Australians lost about AU$340 million to scams in 2017. AU$100 million of the total was lost to investment and romance scams. Comparing AU$100 million lost to dating and investment scams with a mere AU$2.1 million concludes that cryptocurrency scams aren’t the biggest scam issue in Australia right now. But you can never know what the future beholds.