The Australian Securities and Investment Commission (ASIC) has determined that during the coronavirus pandemic there was a sharp increase in investment fraud and has identified cryptomoney-related fraud as a particular concern.
Between March and May 2020, investment fraud of all kinds is reported to have increased by 20% compared to the same period in 2019, according to the ASIC announcement of 24 June.
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It seems that criminals are trying to take advantage of the economic insecurity that many citizens face during the crisis. ASIC’s executive director of assessment and intelligence, Warren Day, warned that scammers are „using old tactics in new and sophisticated ways to attack people. He added:
„The ASIC is particularly concerned about the risk of consumers and investors losing money by buying fake cryptoactives. Most of the crypto investment opportunities reported to the ASIC appear to be outright scams and there is no real underlying investment.
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While reports of fraud have provided the enforcement agency with „valuable information“, the announcement warns readers that it is difficult to catch fraudsters, particularly those operating abroad. Consumers and investors may not be able to recover their lost funds because of this.
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However, the ASIC urges victims to submit their reports on financial and investment scams.
Typical characteristics of suspicious scams include a series of investment offers presented that sound Bitcoin Investor „safer than they are“, requests for payment of money to individuals or companies using multiple or constantly changing bank accounts, false endorsements from celebrities or public agencies, including the ASIC itself, and schemes circulating through online dating sites.
Fear and uncertainty
ASIC is not the first international government agency to express concern about the apparent increase in cryptomoney-related fraud during the COVID-19 crisis. Since the beginning of the pandemic, the United States FBI, the United Kingdom’s Financial Conduct Authority and regional councils, and the United States Commodity Futures Trading Commission have issued warnings about attempts by fraudsters to capitalize on the climate of fear and uncertainty.
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However, data published in April by Chainalysis, the forensic company Blockchain, indicated that the average value of transactions received for the purses of scams identified as being related to cryptomoney dropped by 30% during the month of March.
Chainalysis attributed this in part to the impact of the collapse of the cryptomoney market in mid-March, and argued that concerns about COVID-19 scams may be exaggerated.