In its annual report on scams, Australia’s national consumer watchdog has revealed that cryptocurrency-related fraud has cost Australians over AUD $2.1 million in losses last year.
The Australian Competition and Consumer Commission (ACCC) has published its annual ‘targeting scams’ report on Monday, revealing accumulated total losses of some AUD $340 million to scammers from 200,000 scam reports submitted to the authority in 2017 – both figures a new record.
Cryptocurrency-related scams, relatively, account for a fraction of those total losses. Between January and September 2017, the ACCC saw about $100,000 in losses reported every month due to fraudulent activity in cryptocurrencies. However, the meteoric rise in the value of cryptocurrencies in the Q4 2017 coincided with a sharp increase in scams in the sector, the ACCC said.
An excerpt from the report read:
As the value of actual cryptocurrencies increased, so too did the scam losses in what people thought were real investments. By the end of the year, reports of losses related to cryptocurrencies exceeded $2.1 million but as with other scams, this is likely the very tip of the iceberg.
As bitcoin price peaked near $20,000 in December 2017, the number of losses reported to ‘Scamwatch’, the ACCC’s scam-alert domain, exceeded $700,000. Average reported losses had jumped from $1,885 in January to $13,205 by the end the year, the authority said.
As reported in November, scams abusing bitcoin spiked 126% in the space of a week amid a heightened interest by retail investors looking to invest in cryptocurrencies.
Fake initial coin offering (ICO) schemes and pyramid investment schemes purporting to be crypto-investment products were cited as the most common forms of fraud.
‘[Crypto scams] capitalised 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,’ the ACCC added.
Earlier this year, the ACCC said it received a total of 1,289 public complaints related to cryptocurrency scams in 2017.