Crypto Scams Will Spike Over the Holidays – Here’s What You Need to Know So You Don’t Become a Victim

Each year as the holiday season rolls around, we also need to be on the lookout for potential scammers trying to spoil the fun. This is because scammers become more active during the holidays and attack us while our guard is down.

So far in 2022, Australians have lost around $500 million to scams, which is already far more than was lost last year. Most of these losses, around $300 million, have involved investment or cryptocurrency scams.

Researchers from Deakin University’s Center for Cyber ​​Security Research and Innovation had the opportunity to interview recent victims of these scams. This is what we found.

Anyone can fall for a scam

I was shocked and could not accept that this happened to me even though I was very careful […] I was numb for a couple of minutes since it was a huge amount of money. – (26 year old office manager from South Australia)

These scams have become very sophisticated and criminals have become less discriminating about who they target. This is reflected in recent victim demographics, which show a wide variety of backgrounds, a more even distribution across various age groups, and a nearly even split by gender.

So how can you spot these scams and where can you get help if you’ve been a victim?

If it sounds too good to be true, it could be a scam.

I was dumbfounded, to say the shattered ground beneath my feet would be an understatement, it will take me a long time to recover, financially and mentally. – (36-year-old female, legal practitioner from Victoria)

Most cryptocurrency scams involve the victim buying and sending cryptocurrency to the perpetrator’s account for what appears to be a legitimate investment opportunity.

Cryptocurrency is the currency of choice for this type of crime, because it is unregulated, untraceable, and transactions cannot be reversed.

Victims of these types of scams are targeted using a number of different methods, including:

Investment scams: Scammers pose as investment managers claiming high returns on crypto investments. They get the victim to wire funds and run away with them.

“Pump and pull”: scammers usually promote a new cryptocurrency or NFT project and artificially increase its value. Once enough victims invest, the scammers sell their stake, leaving victims with worthless cryptocurrencies or NFTs.

Romance scams: It involves scammers who use dating platforms, social networks or direct messages to interact with you, gain your trust and present an incredible investment opportunity that promises high returns, or request cryptocurrency to cover medical or travel expenses.

Phishing scams: an old but still effective scam involving malicious emails or messages with links to fake websites that promise great returns on investment or simply steal credentials to access users’ digital currency wallets.

Ponzi schemes: a type of investment scam where scammers use cryptocurrencies collected from multiple victims to pay high interest to some of them; when the victims invest more funds, the scammers get away with all the investments.

Mining scams: scammers try to convince victims to buy cryptocurrencies to use for mining, while in reality there is no mining: scammers just make transfers that look like returns on investment. Over time, the victim invests more and the scammers keep taking it all.

Although methods evolve and change, the telltale signs of a potential scam remain relatively similar:

• very high returns with promises of little or no risk
• Proprietary or secret strategies to gain an advantage
• illiquidity, which requires a minimum amount of accumulation before the funds are released.

Where to find help if you’ve been scammed

I felt helpless, I didn’t know what to do, who to turn to, I was too ashamed and kept blaming myself. – (72-year-old man, accountant from Victoria)

If you think you’ve fallen victim to one of these scams, here’s what to do next:

• report to the Australian Competition and Consumer Commission (ACCC) here or contact the relevant authorities as per the advice on the ScamWatch website

• contact your friends and family and tell them about the scam; they can also be a source of help and support during those times

• As these events can have a psychological impact, it is recommended to speak with your GP, a health professional or someone you trust.

• You can also contact counseling services like LifeLine, Beyond Blue, Sucide Call Back Service, Mens Line and more for help and support.

If you ever find yourself in a difficult situation, remember that help and support are available.

Finally, to avoid becoming the next statistic during the holiday period, keep the following tips in mind:

• do not share your personal data with people online or during a call
• don’t invest in something you don’t understand
• If in doubt, talk to an expert or find resources online yourself (don’t create any links sent to you by scammers).

The work has been supported by the Cyber ​​Security Cooperative Research Center Limited, whose activities are partially funded by the Australian Government’s Cooperative Research Centers Programme.

The work has been supported by the Cyber ​​Security Cooperative Research Center Limited, whose activities are partially funded by the Australian Government’s Cooperative Research Centers Programme.

Jeb Webb does not work for, consult with, own stock in, or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond his academic position.

Risk Warning: Cryptocurrency is a notoriously volatile, unregulated virtual asset with a high level of risk. All news, opinions, research, data or other information contained on this website is provided for informational purposes as general market commentary and does not constitute investment or trading advice.

/Courtesy of The Conversation. This source organization/author(s) material may be of a one-off nature, edited for clarity, style and length. The views and opinions expressed are those of the author(s).