Crypto Scammers Are Running Riot In Australia

Australians have been warned to be “wary” of investing in or sending crypto after the country’s investors fell victim to more than $113 million worth of scams in the first five months of this year alone. 

The warning came as part of new data from the Australian Competition and Consumer Commission (ACCC), which found that Australians were duped for more than $205 million through investment scams between January 1 and May 1 this year. That’s an increase of 166 percent in the same period last year. 

Delia Rickard, deputy chair at the ACCC, said the complexities of trading crypto make first-time investors prime targets for scammers. It’s a trend being seen around the world. 

The world of crypto is plagued with scams. Just last month, scammers were found to have turned to deepfakes of celebrities, NFT projects, and even journalists, to try and swindle a victim’s holdings, adding to the rampant rug pulls, phishing attacks, fake coins and general hacks that have run rampant in the space since its inception. 

In the US, for example, scams are soaring to rates unseen, joining parts of eastern Europe as it becomes a hotbed for crypto scammers. Only last week, the Federal Trade Commission—the ACCC’s counterparts in the US—released a new report that found some 46,000 people had been robbed of more than US$1 billion since the beginning of 2021. 

Most alarming about the findings, according to the FTC, was that crypto-related scams were coming to amount to about one in every four dollars lost to fraud across the country, at an average of about US$2,600 per incident. It’s a trend that is only likely to continue, too.

The frenetic rise of crypto’s crypto scam ecosystem comes as the market—and web3, along with tech stocks more broadly—begins to wobble after a six-month crash that has wiped out about US$1.6 trillion of the asset class’s market capitalisation.

Among the most recent and dramatic falls yet was that of the US$30 billion Terra ecosystem, which last month forced Reddit moderators to pin suicide hotline numbers to the top of threads after many were left without their “entire savings”.

In the middle of May, the Luna token descended into a torpor that saw it lose 99.99 percent of its value. As a result, Kwon Do—the founder behind Terra Luna, who would regularly describe critics in his mention as “poor”—sought police protection for fears the backlash would threaten his physical safety.

Much to the dismay of burned investors, and even Binance CEO Changpeng “CZ” Zhao, Kwon went on to relaunch Terra, dubbed “Terra 2.0”, on May 28, before its value plummeted once again. 

In a recent interview with Crikey, the Australian co-creator of Dogecoin, Jackson Palmer, said he thinks the most recent Terra-induced crypto death spiral won’t be the last. He said he expects the next to be bigger, last longer, and disproportionately impact people already doing it tough. 

“It’s going to be a lot more painful and unfortunately it will probably affect minorities and those at the lower end of the socioeconomic spectrum when it happens,” Palmer said. 

“So, when people who have been suckered in, people who’ve been sold on the [viral cryptocurrency-promoting] Matt Damon commercial and who put their [retirement fund] 401k in, those are unfortunately the people who are going to be hurt.”

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