As investing in cryptocurrency gains popularity, there are a few points to keep in mind to ensure you are investing in genuine opportunities and don’t fall victim to scammers.
“Investment scams are more prevalent than ever, and scammers are capitalising on interest in cryptocurrency in particular,” ACCC Deputy Chair Delia Rickard said.
Scammers use crypto-assets (also called digital, virtual or cryptocurrencies) like Bitcoin or Ether because they are hard to track.
Crypto is a very high-risk and volatile investment. The value can go up or down quickly, and there are no guaranteed returns.
If you lose your money to a crypto scam, it’s unlikely you will ever get it back.
Moneysmart.gov.au advises that there are three main types of crypto scams:
Investing in a fake crypto exchange, website, or app.
Fake crypto products or jobs trading crypto.
Using crypto to pay scammers.
Scammers try to trick people into investing in fake opportunities to buy crypto. Watch out for these tactics:
- Promises of very high and quick returns.
- Fake endorsements from celebrities or government agencies.
- People who contact you through social media or text messages.
- Using dating apps to establish a romantic connection and gain trust before recommending crypto investments.
- Transferring funds to an individual’s account rather than a business.
- Using multiple or constantly changing bank accounts for transfers.
If you are going to give investing in cryptocurrency a try, here are a few things to remember:
- Do some research – gain an understanding of how crypto investment works, search for larger, more popular exchanges, and look for reviews of those exchanges to ensure they are genuine.
- Don’t click on social media advertisements or open spam emails relating to crypto investment.
- Never allow anyone you don’t know to assist you in signing up to a crypto trading platform, and don’t provide anyone with your wallet keys or account information.
- Never give anyone access to your bank account or card details, or allow them access to your computer.
Some top tips from Moneysmart:
- Always question social media ads and celebrity endorsements promoting crypto.
- Search for the token or crypto exchange name on Google, with the word ‘scam’, ‘review’ or ‘warning’.
- Read websites carefully. Verify listed addresses or phone numbers. Look for spelling mistakes. Be wary of promises of large instant rewards if you sign up now, or large returns over a short period.
- Beware of requests for payment in crypto. It is unlikely that any legitimate business will ask you to pay exclusively in crypto. Be wary of any recruiter, online romantic partner, or online acquaintance who asks for a crypto payment.
- Be alert if someone offers ‘high returns’ for ‘low-risk’ crypto investments.
- Look for the AUSTRAC registration number. Digital currency exchanges in Australia are registered with AUSTRAC. Look for the registration number on the exchange website.
Refer to Crypto scams – Moneysmart.gov.au for more details.
