Source: Asic
During the COVID-19 (coronavirus) pandemic, ASIC has seen an increase in reports from consumers losing money in crypto-asset (or cryptocurrency) scams.
Reports of misconduct received by ASIC from March to May 2020 are up 20% compared to the same period last year.
ASIC has also observed an increase in romance scams where people meet online and form a romantic connection. A scammer then directs someone to an investment opportunity in crypto-assets or forex trading.
Examples of how crypto scams can work
Investors who have been scammed are typically called or emailed by scammers with an investment opportunity, or approached by their friend, family member, or online romantic partner who tell them how they have made money online and suggests that they try it too.
Investors typically sign up to ‘crypto-asset trading’ online and deposit funds into a trading account, either via a crypto wallet or bank account.
Scammers encourage consumers to deposit more funds into the account.
When an investor logs into their account, it may look as though they are making profits initially (due to fake data), but eventually shows ‘trading losses’ even though no actual trading is taking place.
When the consumer asks to withdraw their funds, the scammers either cease all contact, or demand further payment before funds can be released.
Often scammers are also seeking to mine personal information from victims to engage in identity fraud.