Australians Lost 3x More in Bank Scams than Bitcoin Fraud

Investing in cryptocurrencies is a new trend in the financial market that has exploded with Bitcoin among the top names, however, the number of scams involving the asset has also increased in 2020, as detailed by the crypto trading simulator Crypto Parrot.

Bitcoin Versus Bank scams

This directly competes with other types of fraud considered more traditional. According to the data compiled by Crypto Parrot, Australians lost an equivalent of AUD 26.65 million in fraud where Bitcoin was the payment method in 2020.

Despite Bitcoin being a new payment method, the fraud linked to the cryptocurrency ranked second behind banks, scams involving bank transactions amounted to AUD 97.65 million, which is at least 3.7 times more than the amount lost in bitcoin payment fraud. Cash ranked fourth at AUD 8.57 million, while credit cards emerged fifth at AUD 8.1 million.

Elsewhere in terms of reported scams in 2020, payments methods not provided ranked top at 190,959 cases, followed by banks at 8,215. Credit cards rank third at 6,267 cases, while Bitcoin is in the sixth spot with 1,985 related cases.

The factors pushing Bitcoin’s related scams are its underlying nature that has contributed to the crypto emerging as the preferred means of payment by scammers. Bitcoin is decentralized, and when it is used in fraud, the lack of a central authority makes it hard to recover.

The anonymous nature of crypto means its ideal for use in criminal activities, and lastly, Bitcoin transactions can not be changed or removed. Unlike traditional forms of payments, no one can alter records of Bitcoin.

Bitcoin scams were at the centre stage in 2020, with Australia’s regulator linking the spike to the pandemic pushed further by lockdowns in most of the country. The ASIC identified that most scams emerged in the form of ‘investment opportunities’, with victims being tricked into depositing crypto into ‘crypto-asset trading’ online accounts.

The fraudsters presented fake data alluding to the victims were making profits to then be hit with trading losses messages upon requests to withdraw. With the pandemic, people are online more on social media platforms, which became the perfect ground for targeting potential victims.

Victims also deployed social media to share their referral codes with friends and contacts, bringing more people into the group involving the fake investment scheme. Social media as a whole is a useful tool for scammers for people who feel they’ll miss out if they do not invest.

On top of that, these criminals have ways to mint money from victims, like some schemes offering investment tips online that redirects to scam sites, some scammers even pose as celebrities to aid their pitch to victims. This all being said there needs to be better regulators and oversight in the sector, especially as critics have long pointed out the asset’s ability to aid criminal activities.