Australia Proposes “Scams Code Framework” in Wake of $3 Billion in Losses
A new scam-fighting framework has been proposed in a consultation paper from the Australian Treasury, which aims to clarify the roles of government and private sector in minimising the impact of scams on the Australian economy.
The paper titled ‘Scams – Mandatory Industry Codes’ proposes the introduction of industry-specific scam codes for the banking, telecommunications and digital communications platforms sectors. It also includes a catch-all ‘future sectors’ category, which may encompass cryptocurrency exchanges and other crypto services in the future.
Framework Aims to Better Coordinate Fight Against Scams
The proposed framework aims to better coordinate the fight against scams by ensuring that government, regulators and the private sector all have “measures in place to prevent, detect, disrupt, and respond to scams, including sharing scam intelligence across and between sectors.”
Australia’s Scam Problem
As anyone who has an email address or mobile phone knows, Australia has a big scam problem. According to the ACCC, in 2022 Australians lost a combined total of $3.15 billion to scams, up almost 80% from 2021.
Of the total losses to scams in 2022, almost half—$1.5 billion—went to investment scams, but perhaps surprisingly only $221.3 million went specifically to scams where crypto was the payment method.
Although a relatively small percentage of total losses to scams involve crypto, that percentage is growing rapidly—year on year the figure has increased 162.4%—the figure may also be an underestimate as the Treasury says it has not been able to obtain scam loss data from cryptocurrency exchanges.
How Might This Impact Crypto?
Although crypto exchanges don’t fall into one of the three main sectors impacted by the proposed framework, digital currencies are mentioned in the paper as a potential ‘future sector’.
Should this framework be applied to crypto exchanges it would require that they adhere to the same mandatory codes as the much more established banking sector, adding complexity that could stifle innovation.
However, despite a lack of clarity about exactly how the proposed framework would impact the crypto industry, it’s fairly widely accepted that reducing the growth of crypto scams and increasing consumer protections would be a good thing for crypto and would help drive further adoption.