Aussie Regulator Says Cryptocurrency Makes 1% of Illicit Acts

Aussie Regulator Says Cryptocurrency Makes 1% of Illicit Acts

Australia’s consumer watchdog recently discovered that less than one of illegal acts in the country came from fraudulent activities related to cryptocurrency in 2017.

Based on its annual report, the Australian Competition and Consumer Commission (ACCC) attribiuted some 0.617 percent of fraudulent acts mounted to crytocurrency scams. This is equivalent to about 2.1 million Australian dollars ($1.59 million) in losses.

“In 2017, the ACCC, Australian Cybercrime Online Reporting Network (ACORN) and other government organisations such as the Australian Taxation Office received over 200 000 scam reports with reported losses exceeding $340 million, an increase of $40 million over 2016 losses,” the their ninth annual report stated.

It added approximately $100,000 was reported lost per month to scams due to illicit activities linked to virtual currencies from January to December this year. However, reported losses to Scamwatch surpassed the $700,000 level last December and the average reported loss surged to $13,205 in December 2017 from $1,885 in January 2017.

The government agency alone received more than 161,500 scam reports that translated to financial losses of $90.9 million in the previous year. This is 8 percent higher than the reported losses in 2016.

The speculative fever revolving around bitcoin, ethereum, and other digital currency caused the prevalence of digital currency swindle. Noting the increased popularity of cyrptocurrency speculation during the last three months of 2017, the ACCC received reports of different deceitful acts pertaining to virtual currencies such as fake initial coin offerings.

Aside from the initial coin offering hoax, other scammers “capitalized on the general confusion about how cryptocurrency works and 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 report added.

The report explained swindlers eyed not only those attempting to invest in stocks or initial coin offerings, but also asked payments using bitcoin or any other digital currency because payments made through virtual currencies, it is easier to remain anonymous.

Fraudsters targeted Australian enterprises by sending out business email compromise scams, which led to losses amounting to more than 22.1 million Australian dollars ($16.8 million) that were transferred to scammers.

Investment scams, which reported the highest number of losses in 2017, exceeded the 64 million Australian dollars ($48.6 million) threshold last year, up by 33 percent from 2016. Dating and romance scams comprised over 42 million Australian dollars ($31.9 million).

“The average amount reported to Scamwatch from those who lost money was $6471. This is a 10 per cent decrease from the average loss in 2016 which was $7226. The lower average loss in the Scamwatch data can be attributed to a greater number of reports with lower loss amounts and these were mostly found in ‘Online shopping’ scams,” it said.

The most commonly used contact methods were phone (40 percent) and emails (31 percent). Although women reported the majority of scams, men lost more money than women.

Fax-based scams remain a trend in the past year but only comprised a small portion of reported scams in the country, which usually look after businesses.

The institution released the report which gives an insight into “emerging trends and techniques employed by scammers” in Australia.

It seeks to “inform the general public on scam losses” and “identify emerging trends and techniques employed by scammers to extract money and personal information from their victims. The increasing losses due to the deception of people and entities exhibit the continuing harm on the Australian people.

Founded in 1995, the ACCC is an independent authority of the Australian government responsible for the enforcement of the Competition and Consumer Act 2010 and laws which promote competition and fair trading for the welfare of Australian citizens.

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