Following a similar warning issued by the Australian Competition and Consumer Commission (ACCC), Australia financial regulator ASIC is warning consumers who have joined ‘share trading’ or ‘stock tips’ messaging app groups that scammers are using these forums to push investments on fake crypto-asset trading platforms.
ASIC said that these fake platforms show profits and trades, but in fact, there is no real trading, and the site contains fake data. Any money deposited into these platforms goes straight to the scammers.
The fake platforms ask for fees to release assets or proceeds. These fees go straight to the scammers and no assets are released.
ASIC has previously warned about a rise in scammers using messaging apps such as WhatsApp to conduct widespread, coordinated pump and dump schemes targeting retail investors. These schemes are illegal.
How the scam works
- Scammers initially target victims through social media advertisements and posts claiming to offer trading tips on shares.
- Victims are invited to messaging apps claiming to share recommendations from well-known figures, who the scammers impersonate.
- Scammers recommend victims invest via a fake crypto asset trading platform that the scammers have set up. The screen may show profits and trades, but in fact, there is no real trading, and the platform contains fake data.
- When the victim tries to withdraw their assets, scammers ask for withdrawal fees, claiming it is necessary to unlock their investment.
- Victims are unable to recover their assets as the money ‘invested’ goes straight into the scammer’s bank account and not towards any real investment.
- Scammers are also using this tactic to target victims of pump and dump schemes, using money recovery scams to prey on people hoping to get their money back.
Young people being targeted
While anyone can be targeted for these scams, recent Moneysmart research found there is widespread exposure to crypto trading advertisements on social media. A survey of 1,127 Australians aged between 18 and 28 found that:
- 23% own crypto assets (e.g. cryptocurrencies, NFTs).
- Of these people, two-thirds (66%) have a short-term/speculative approach to managing their crypto investments.
- 29% said they conduct short-term trading based on social media influencers.
- Overall, 72% of Gen Z survey respondents said they have seen social media ads about crypto. 41% said they have even been contacted by someone about investing in crypto.
What this might look like
The ACCC, in its warning, provided several visual examples of crypto scams, including (from left to right below):
- a scam cryptocurrency investing WhatsApp group,
- a scam cryptocurrency investment WhatsApp message, and
- a scam cryptocurrency investment platform.
Registered virtual asset service businesses
Businesses providing virtual asset services, such as exchanging money for virtual assets (such as crypto), must be registered with AUSTRAC and comply with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) obligations.
