News Australian Cryptocurrency Scams on the Rise, but Still Remain...

Australian Cryptocurrency Scams on the Rise, but Still Remain Small Percentage of All Scams

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Cryptocurrency scams in Australia reached $6.1 million AUD in 2018, but this is still only a small percentage of the total $107 million AUD when all scams are accounted.

The Australian Competition and Consumer Commission (ACCC) shows in their report that cryptocurrency scams within the country were up 190% in 2018 from the $2.1 million AUD reported in 2017. However, there were only 674 reports of cryptocurrency scams of the total 177,516 scams reported to the ACCC, but “[t]he scam category with the highest reported losses to cryptocurrencies was ‘investment scams’ with $2.6 million [AUD] in reported losses”. The report also showed that cryptocurrency scams had significantly affected younger individuals online since “[a]lmost 50 per cent of the losses reported where cryptocurrency was the payment method were men in the 25–34 age group”.

Interestingly, scams with “total reported losses via gift cards exceeded $4.3 million [AUD] from almost 1500 reports”, of which “iTunes cards accounted for 72 per cent of these losses or $3.1 million [AUD], an increase from the $1.2 million [AUD] reported in 2017”. Additionally, “[i]n late 2018, reports of the Australian Taxation Office impersonation scam rose 900 per cent with tens of thousands of Australians reporting an automated ‘robo-call’ version of the scam”.

Scams on the rise around the world

This Australian scam data is not alone since scam reports have been repeatedly appearing in the news. The most recent one was Microsoft Outlook getting hacked where hackers were able “to gain access to Microsoft customer support employee’s accounts in recent weeks, after which they were able to access non-corporate email accounts, including in Hotmail and MSN”. There were then reports that consumers experienced unauthorized access to their cryptocurrency exchange accounts that were promptly emptied.

“One victim, named Jevon Ritmeester, posted on the Tweakers forum that his Kraken cryptocurrency exchange account had been hacked and that he lost around 1 bitcoin (worth about $5,260 at press time) as a result.

Ritmeester wrote that after visiting Kraken and finding his password no longer worked, he searched his emails in Outlook and found that several notifications of the changed login were in the trash. He further found that someone had enabled Outlook to automatically move any email mentioning Kraken to the trash and forward that message to a Gmail address, presumably owned by the hackers..”

However, one of the defenses against this type of unauthorized access is 2FA, since this requires the approval of login access on another device (usually a mobile phone), but Ritmeester said that he did not have the feature enabled. These types of scams and hacks, while still small compared to larger scam and hacking networks, highlight how many thieves are relying on consumers to have lax security or make user errors. Many services offer robust security protocols, but if a user does not take advantage of them, then they can unknowingly be exposing their data and their cryptocurrency wealth.

Dash offers security solutions for different types of consumers

The Dash community has recognized that there are different types of consumers that behave differently and thus require different solutions. At its core, Dash has practiced robust security protocols and will even be enabling ChainLocks soon to make the network even more secure than other cryptocurrencies against 51% attacks. Dash is attempting to make security and private key management easier with friendly user interfaces and community educational groups, but even this solution could be seen as too advanced for many consumers that are necessary for mass adoption.

To accommodate consumers that want a hands-off approach, Dash has also focused on gaining integrations with custodial cryptocurrency providers, such as BitGo, so those that wish to delegate their ownership and management responsibilities to another party can do so. Further, Dash recently released Deterministic Masternode Lists so masternode operators could split their keys to retain their collateral ownership key, but pass on the operating and voting keys to another party that they believe is more qualified for the task.

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