Northern Territory Police Warn Crypto Scams Pose Huge Threat After Billions in Losses
The Top End of Australia has been subject to a series of hefty crypto scams over the past 24 months, with one Northern Territory resident losing nearly $5M in 2022. As a federal inquiry into cybercrime and enforcement, the NT police submitted information of their scam-related findings – and it wasn’t pretty.
Aussies Lose Billions to Scams in 2022
According to the most recent data, Australians lost a whopping AUD $3.1B due to scams in 2022, a record high. There are several reasons for the influx of fraud, including inflation, widespread internet usage by those with weaker technological knowledge and advanced scam tactics. The AFP even warned against the generative power of AI like WormGPT, which can easily create phishing or malware code for uneducated scammers.
Crypto scams were the main target of the NT police’s submission, with the report stating:
The largest financial harm to individuals in the NT is currently being caused by cryptocurrency investment scams…It is extremely difficult for police to recover funds once they have been transferred to these fake investment companies.
While crypto investment scams are a very real and unfortunate threat, especially in an unregulated market, digital currency is not the boogeyman that the police and media make it out to be. Crypto is often used as a payment method by fraudsters, however, bank transfers were still the primary mode of exchange according to the last ACCC report.
FBI Report Highlights Other Avenues of Investment Fraud
And other modes of fraud are still significantly more prevalent – according to a 2022 FBI report, crypto accounted for about 25% of all investment fraud in the United States.
It’s worth noting that breakdowns of investment scams between crypto and other forms are not disclosed in current data. So all we know is that fraudsters are requesting victims pay them in crypto rather than fiat – which is not necessarily a flaw in digital currency (as they would otherwise simply be paid via bank, credit card or gift card transfer). However, this does make it harder for enforcement agencies to track criminals, which is the point the NT police is trying to make in its submission.
Being careful online, especially when trawling the crypto industry, is certainly true. Crypto social media is full of impersonators, shills and plenty of false projects. However, this is no different to the regular financial markets – you just don’t hear about it as much.