Losses through investment scams have risen sharply so far this year and cryptocurrencies are involved in the majority of those losses.
The Australian Competition and Consumer Commission has released the latest Scamwatch data, showing Australians lost A$205 million to scammers over the four months to the end of April.
The majority of losses were to investment scams, with $158 million lost. That is a three-fold increase over the same period last year.
Of the $158 million, $113 million involved crypto investments, and cryptocurrency was the most common payment method for all investment scams.
ACCC deputy chair Delia Rickard said in a statement that the numbers underestimate the true extent of losses. The data is largely based on people reporting their experience to Scamwatch and the ACCC’s research shows that only a small proportion of people report their losses.
Meanwhile, regulators are moving to get more control of crypto markets.
APRA wrote to ADIs earlier this year setting out a regulatory roadmap for those that engage in activities associated with crypto assets.
The regulator wants ADIs to conduct appropriate due diligence and comprehensive risk assessment before engaging in activities associated with crypto assets. It expects the risk management controls to be “robust”.
In April, Austrac issued a guide, Criminal Abuse of Digital Currencies, which included decentralised finance and non-fungible tokens in a list of emerging risks.
It said financial institutions should be suspicious of customers with unexplained sources of wealth, customers who purchase amounts of digital currency that are not consistent with their available wealth, and customers who make numerous transactions involving fiat currency deposits and digital currency withdrawals via cryptocurrency ATMs.
The ACCC is taking action over alleged misleading conduct by Facebook’s parent company Meta for publishing scam celebrity crypto ads on Facebook.