Speaking to ABC News, financial analyst Martin North warned crypto enthusiasts across Australia about the pitfalls associated with new crypto websites – whether they are exchanges or something else, such as shady individuals posing as investment advisors.
We have seen these actors pose as famous Australian people such as Dick Smith and Hugh Jackman to name but a few who have been targeted in these crypto scams.
Banks Cannot Help You
Mr. North stated that as crypto increases in value, the number of bad actors scouring the net to find naïve investors will also increase. Furthermore, Australian banks, if willing to help, often can’t do much themselves – as long as a transaction was done willingly, banks have a hard time recovering funds sent to fraudsters.
“A lot of it is actually through social media like Facebook groups or other online forums and in some cases this unfortunately points you not to necessarily very legitimate operators. And so it is quite feasible to get caught with somebody offering what looks like a great deal with regard to investing in crypto but it might not actually be a real company, it might be a scam company, a lot of those are offshore. And the problem of course if it’s offshore is that it’s not caught or protected with any legislation that protects Australian companies.”
For instance, Sylvia Chau – a Sydney resident who lost $2.6 million to an unlicensed crypto broker named Blue Lexus – was unable to get her money back. She later filed a case with the AFCA, who stated that although a few errors had been made by the bank in the handling of the case, they were not liable.
How to Spot Crypto Scams
However, situations like these can generally be avoided with a little sleuthing. For instance, dubious companies may often claim to be active in the crypto domain for years. Using services like the Internet Archive, we can easily check if this claim is true or not. Other platforms like Web Of Trust also allow you to check what others have to say about the website you plan to visit.
Although banks will not always be willing to help in case of a mishap, a little bit of caution can help you avoid crypto scams – and the headaches.
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