Over the past two years, the Northern Territory, located in the Top End of Australia, has experienced a string of substantial crypto scams.
In 2022 alone, one resident from the Northern Territory suffered losses totaling nearly $5 million. Amid a federal inquiry into cybercrime and enforcement, the NT police have submitted troubling information regarding their findings on scam-related incidents.
Aussies Lose Billions to Scams in 2022
Based on the latest data, Australians suffered a staggering loss of AUD $3.1 billion due to scams in 2022, marking a record high. Several factors contribute to the surge in fraudulent activities, including inflation, widespread internet usage among individuals with limited technological proficiency, and the adoption of advanced scamming techniques. The Australian Federal Police (AFP) has even cautioned against the potential threat posed by AI technologies like WormGPT, which can facilitate the creation of phishing or malware code, particularly for less sophisticated scammers.
The submission by the Northern Territory Police primarily focuses on crypto scams, as highlighted in the report:
The largest financial harm to individuals in the NT is currently being caused by cryptocurrency investment scams…It is extremely difficult for police to recover funds once they have been transferred to these fake investment companies.
– NT Police Force
Although crypto investment scams pose a significant and regrettable threat, particularly in an unregulated market, it’s essential to recognize that digital currency itself is not the ominous force portrayed by law enforcement and media outlets. While it’s true that fraudsters often utilize crypto as a payment method, it’s important to note that bank transfers remain the primary mode of exchange, as indicated by the most recent report from the Australian Competition and Consumer Commission (ACCC).
FBI Report Highlights Other Avenues of Investment Fraud
It’s important to acknowledge that while crypto is indeed involved in a significant portion of investment fraud, other forms of fraud remain more prevalent. According to a 2022 FBI report, crypto accounted for approximately 25% of all investment fraud cases in the United States.
It’s crucial to recognize that current data does not provide a breakdown of investment scams between crypto and other forms. Therefore, we only know that fraudsters are increasingly requesting payment in crypto instead of fiat currency. This isn’t necessarily a flaw in digital currency, as they would otherwise seek payment through bank transfers, credit cards, or gift card transfers. However, this does present challenges for enforcement agencies in tracking criminals, as emphasized by the NT police in their submission.
Practicing caution online, especially when navigating the crypto industry, is indeed wise. Crypto-related social media platforms are rife with impersonators, shills, and numerous fraudulent projects. However, it’s essential to recognize that this phenomenon is not exclusive to the crypto market; similar issues exist in traditional financial markets as well, though they may receive less attention.
