Popularity of cryptocurrencies among scammers grows

ACCC report reveals cryptocurrency increasingly popular as a method of receiving payment

Although Bitcoin may have lost much of its lustre among speculators, the Australian Competition and Consumer Commission has revealed that in 2018 it and other cryptocurrencies remained popular among scammers.

The consumer watchdog’s latest annual round-up on scam activity reveals that during 2018 government agencies received 674 reports involving cryptocurrencies being used to pay scammers. Those scams involved reported total losses of $6.1 million — a 190 per cent increase over the $2.1 million reported to the ACCC in 2017.

(The previous report didn’t include the number of scam reports involving cryptocurrencies, just the total losses.)

“The scam category with the highest reported losses to cryptocurrencies was ‘investment scams’ with $2.6 million in reported losses,” the Targeting Scams report stated.

The report also noted cases where of “victims of various types of scams being directed by a scammer to the nearest Bitcoin automatic teller machine to convert money to Bitcoin and then transfer it to the scammer.”

In October, Victorian Police warned people against paying fake tax debts at Bitcoin ATMs. Police said investigations had revealed that at least four people from Melbourne’s eastern suburbs had deposited up to $50,000 at a bitcoin ATM in Braybrook.

The victims were told that if they failed to pay an alleged tax debt then they would be arrested. Some were told that the scammer had spoken to the victim’s accountant or to the Australian Federal Police in order to confirm the debt.

“Almost 50 per cent of the losses reported where cryptocurrency was the payment method were men in the 25–34 age group,” the ACCC report said. “As would be expected for an online phenomenon, 80 per cent of reports involving cryptocurrency identified an online mode of communication (‘internet’, ‘social networking/online forums’ or ‘email’) as the method by which the scammer and victim made contact.”

Targeting Scams revealed increased losses reported to Scamwatch and other government agencies in 2018 compared to the prior year.

Reported losses were in excess of $489 million, $149 million more than in 2017. Investment scams were the most lucrative, reaping an $86 million windfall, up 34 per cent compared on 2017.

The full report is available online.