New Report Calculates Money Lost to Crypto Scams in Australia Last Year

On the 21th May, Australian Competition and Consumer Commission’s (ACCC) annual scams report published that consumers lost almost $2.1 mln to cryptocurrency scams last year.

The ACCC’s analysis uncovers that the utilization of digital currencies as a payment strategy in scams peaked in the last quarter of 2017. Nearly $100,000 was reported lost every month to cryptocurrency based scams from January to September, while in December, reported losses pass $700,000. The average reported loss in December had taken off to $13,205 from $1,885 in January.

Among major means for misleading clients, the Commission featured fake initial coin offerings (ICO), pyramid schemes and ransomware payments:

“… 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 showed that the figure was impacted by the surging value of cryptocurrency toward the end of the year, saying “as the value of actual cryptocurrencies increased, so too did the scam losses in what people thought were real investments.” Still, the $2.1 mln in total losses was regarded to be conservative as “with other scams, this is likely the very tip of the iceberg,” the report said.

In the start of May, Australia’s Securities and Investments Commission (ASIC) said that it was making a move to protect consumers in the ICO space. ASIC was delegated powers to intercede where it judges that an ICO is “misleading” speculators, or else taking part in unlicensed conduct even when the ICO in question “does not involve a financial product.”

In March, Japan’s National Police Agency (NPA) published statistics on crypto related scams in 2017. It said that more than $6.2 mln in digital cash were lost because of extortion and theft, anyway, this figure does exclude the over $500 mln hack of NEM from crypto exchange Coincheck in late January.


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