Bitcoin Price: Cryptocurrency Scams Lose Australians $ 328 Million

And why shouldn’t he be? Bitcoin is widely regarded as the king of cryptocurrencies, accounting for around half of the market capitalization of all crypto available globally.

The fact that few people really understand how bitcoin works and what determines its value means that it is ripe for crooks and fraudsters.

In 2020, Bitcoin investment scams accounted for $ 328 million in losses for Australians alone – and these are just the ones we know of.

Despite the fact that nearly 1 in 5 Australians own some type of cryptocurrency, there is no formal regulation of crypto trading in Australia, so it’s important to do your research before committing.

“Anyone can accept bitcoin payments from anyone, anywhere in the world, at any time. This opens up incredible opportunities for investors, but it also means it’s also fertile ground for crooks, ”said Adrian Prezlozny, CEO of Independent Reserve, one of the largest cryptocurrency exchanges in Australia.

“Like any financial product, it’s worth taking the time to protect yourself and your investment. The best way to do this is to know what to avoid and who to trust.

“The most important thing to remember is that just because bitcoin is a digital currency does not guarantee that you will get rich quick. Free money doesn’t exist – if the offer sounds too good to be true, it usually is, ”he says.

How to spot a bitcoin scam

There are many different types of cryptocurrency scams – what to watch out for and what to avoid.

• Ponzi or Pyramid Schemes: This often sounds appealing because they promise you a steady return on your investment. You might be told that the money is generated by bitcoin trading activities, but in reality there is no real investment.

• Bitcoin flip: This usually involves claims that you’ll double your money overnight if you pay an upfront start-up fee to trade bitcoin for cash. If it sounds too good to be true, it is.

• Brokers / offshore investment sites: cryptocurrency is a volatile asset. Companies promising big returns on a small deposit with little risk are lying. It is that simple.

• Large account output: After an initial investment, scam sites can show you a large balance that they have accumulated by “investing” or “negotiating” your deposit. They will then give you the reasons to deposit more money before you can “release” your funds.

• Any office: A broker or advisor asking you to install screen sharing software, especially “Any Desk”, is almost certainly a con artist. No genuine business needs to see your desktop screen. It is usually a ploy to retrieve your account information.

• Blockchain scam: Don’t trust anyone who claims to have ‘found’ a large amount of cryptocurrency that is yours on the blockchain. They will usually charge you an “unlock fee” for withdrawing your funds, but you can guarantee that they will run away with your money.

• Recovery services: cryptocurrency transfers cannot be reversed. Any recovery service that asks for money up front is almost certainly a scam and should be avoided.

Protect yourself and your investment

“The best way to protect yourself and your investment is to choose an established online trading platform that you can trust,” says Adrian.

“A reputable exchange should be able to easily answer your questions about how they handle your transactions and store your Bitcoin. It’s important to ask questions about things like security, data integrity, cold storage, fees, consumer protection, and available parts.

“A crypto exchange with a solid background that is trusted by many clients and that has the right checks and balances in place is your safest bet,” he says.