Australia Released a Report on Loses from Cryptocurrency Scams

The Australian government has recently released an analysis about how much money their populace lost to cryptocurrency scams. Published on May 21, the report revealed scams took an estimated $2.1 mln where it reached its highest during the last months of 2017.

From January to September 2017, crypto scams were hauling in around $100,000 per month. But in December, that number went over $700,000. Average losses during January was around $1,885 and took quite the spike in December where it crested over $13,000.

The Australian Competition and Consumer Commission (ACCC) highlighted that the most prominent types of crypto scams used were ransomware payments, fraudulent initial coin offerings (ICO), and pyramid schemes. Experts said that the lack of information coupled with the desire to invest in the growing crypto trend led most victims to these scams.

Moreover, victims were usually introduced to the scams by friends and family members who also thought they were investing in a legitimize ICO. Instead, both got caught in what were essentially pyramid schemes, using the popularity of cryptocurrency to blind them with fast and massive investment returns.

The ACCC said that huge number spike seen in December 2017 was associated with the surge of cryptocurrency value in the same month. The scammers most likely used this exponential growth as bait to create a sense of urgency to invest large sums in their illicit activity. However, the report said that the $2.1 mln figure was relatively tame compared to other scams.

At the start of May, Australia’s Securities and Investments Commission (ASIC) released a statement saying they’re working on solutions to shield consumers in the ICO sphere. ASIC was granted authority to take actions against ICOs if the agency deems the company is conducting questionable activities, even if these activities don’t necessarily “involve a financial product.”

Meanwhile, Canada and the United States are cracking down hard on cryptocurrency scams. Regulators have implemented Operation Crypto-Sweep, which consists around 70 inquiries and investigation. It also has 35 pending and completed procedures in the early parts of May.

This operation is going to be spearheaded by the North American Securities Administrators Association (NASAA) with the agency working in tandem with state and provincial authorities. Their warning to the public is to be wary about ICOs that offer opportunities that are too good to be true. Another public awareness raised by the Securities and Exchange Commission was launching a fake site that is a mock-up of how most fraudulent ICO websites look.