Scam activity has increased significantly and scammers often target cryptocurrency users because digital coins can be moved quickly and anonymously. This article explains how scams work, the warning signs to look out for and where to get help.
If you are wanting more information on types of crytocurrency scams, please read our article Common Cryptocurrency Scams.
Understand why crypto transactions are high-risk
Cryptocurrencies run on decentralised blockchains. Unlike bank transfers, there is no central authority that can reverse or freeze a completed transaction. Money sent to a recipient’s wallet permanently transfers control of those assets. If you don’t control the private keys of the destination wallet, you are handing ownership of your coins or tokens to someone else. Payments made using crypto are very hard to trace and recover. Always check before sending your coins to another person, platform or investment scheme.
Do your own due diligence
Before transferring assets, investigate who you are dealing with. A few minutes of research can save you from losing your savings. Check whether an investment promoter holds an Australian Financial Services Licence and whether the company is listed on official registers. Search online for the person or business name with words like “scam”, “review” or “warning”. Read the project’s whitepaper (if investing in new tokens) and be wary of poor spelling, vague promises and claims of guaranteed returns. If something sounds too good to be true, it usually is.
Government resources
Several Australian government agencies offer free information and support:
- ScamWatch (ACCC) – Provides alerts and advice about the latest scams. Their site describes different types of scams and explains what to do if you’ve been scammed. They also operate an online form so you can report a scam.
- Australian Cyber Security Centre (ACSC) – Offers personal security guides, including advice on remote-access scams and protecting your family.
- MoneySmart (ASIC) – Has detailed information on investment and crypto scams. For example, they warn that scammers will often use “crypto” investments, offer guaranteed high returns or pressure you to pay fees to withdraw funds.
Visit these sites and familiarise yourself with their advice. Many scams originate overseas, so Australian authorities may be limited in what they can recover, but reporting helps them warn others and investigate.
Reporting scams
If you think you’ve been scammed, act quickly. ScamWatch recommends contacting your bank or card provider immediately to ask them to stop any transactions. Change the passwords on your devices and online accounts and then report the scam to ScamWatch. Cybercrime such as hacking or identity theft can also be reported to ReportCyber (ACSC). The sooner you act, the better your chance of limiting losses.