Australian crypto investors lost over $2.1 million in scams in 2017. This is according to a report released by the Australian Competition and Consumer Commission. The commission made the announcement in its annual report.
Crypto-related scams are rising with rise in coin prices
In the report, the commission said that the increase in crypto-related incidents of scam corresponded with the rise in the prices of coins. Many cryptocurrencies experienced a crash towards the end of last year before picking up at the start of 2018.
In December last year, the price of bitcoin rose to around $20,000. The commission says that during the same period, cases of scams amounted to 700,000. The report further says that many cases of scams were reported in the form of ransomware payments, crypto-related pyramid schemes and fake ICOs.
In the period between January and September 2017, the commission recorded cases of scams amounting to around $100,000. The commission compiled the report through ‘Scamwatch’, its fraud and scam department.
The trend may continue
According to the commission, the cryprocurrency industry will continue to experience scams. This is just the nature of new industries and investors must be careful.
In total, the report says that a total of $340 million was lost in scams in Australia alone in 2017. This, according to the report is a 126% increase. The trend is mainly motivated by the growing interest among investors who want to invest in the cryptocurrency market. The report further says that pyramid investment products and fake initial coin offering (ICO) schemes were the most common forms of fraud reported.
The commission says that it is the increasing cases of scams that created confusion in understanding the working of cryprocurrencies. Instead of people learning how to buy cryptocurrencies themselves many resorted to pyramid schemes.
According to a report by CoinDesk, the loss from the biggest cases of hacks, scams and attacks in 2017 amount to about $490 million. In addition, a report by the Wall Street journal says of the 1,450 ICOs it reviewed, 271 were flagged down for faking or missing executive teams, issuing unrealistic promises of guaranteed returns and having similar investor documents for several investors.
Bitcoin (BTC-USD) is trading at $8330.28 down $89.37 (1.0614%) with about $471MM trading hands in the last 24 hours. Bitcoins current market cap is about $142 Billion USD.
Ethereum (ETH-USD) is trading at $687.39 down $9.34 or 1.3% and Ripple (XRP-USD) is trading at $.66 down almost 1%.
