Cryptocurrency scam losses hit new high in Queensland as cost of living bites – ABC News

Cryptocurrency scam losses hit new high in Queensland as cost of living bites – ABC News

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September 12, 2022 by Coinvasity
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Cryptocurrency scam losses hit new high in Queensland as cost of living bitesFollow the latest developments as Queen Elizabeth II's coffin arrives in Edinburgh as part of the funeral procession, in our live blog.Follow all the reaction to the death of Queen Elizabeth IIQueenslanders have lost nearly $40 million to investment scams including cryptocurrency swindles this year — the
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Cryptocurrency scam losses hit new high in Queensland as cost of living bites
Follow the latest developments as Queen Elizabeth II's coffin arrives in Edinburgh as part of the funeral procession, in our live blog.
Follow all the reaction to the death of Queen Elizabeth II
Queenslanders have lost nearly $40 million to investment scams including cryptocurrency swindles this year — the highest loss ever recorded in the state.
Australian Competition and Consumer Commission (ACCC) figures from January 1 to August 28, show Queenslanders lost $38.6 million in investment scams.
At the same time last year, Queenslanders had been defrauded of just $19.8 million.
Nationally, $263 million has been lost this year, almost double the losses in 2021.
One of the state's top financial crime police officers says the new breed of crypto-scammers are increasingly using sophisticated strategies to lure their victims in, including posing as celebrities and even as Queensland police officers on social media.
Australian Federal Police (AFP) have also called cryptocurrency an "emerging threat" with one report every eight minutes last financial year, a 13 per cent increase on the previous year. 
Cryptocurrency investment scams are the main driver of the increase and a record number of Queenslanders are paying the price.  
Here are their stories.
Sunshine Coast woman Ella (not her real name) lost her life savings through a sophisticated and intricate scheme.
Over a five-week period, she said she was "groomed" and "conned" to make three deposits of $34,000 to what she believed to be a legitimate web-trading platform.
"My bank … didn't come up with any warning signs that would have made me think: 'This is a bit dodgy'," she said.
After depositing the funds, the money was converted into cryptocurrency accessible via a "wallet" address.
She said the online portfolio appeared to correlate with the stock exchange giving the illusion that it was legitimate.
"The thing is, none of it is real," Ella said.
"The minute it leaves [the web trading platform] to that wallet address … it goes into all these accounts all over the world and it's impossible to actually follow up on any of these accounts from this one wallet address."
After Ella's third and final deposit she tried to pull her money out because alarm bells rang and she had "nothing else in the tank".
She was told by scammers to remortgage her house or turn to credit. 
Advocacy group Choice calls for better consumer protection as one in nine Australians buy cryptocurrencies.
A few months later, Ella received a call out of the blue from a "very smooth" man she'd never heard of who claimed to have her money.
"Then came the announcement that in order for me to get my money back, I would have to put in $5,000 USD," she said.
"I just hung up but he continued to call me for three days afterwards obviously thinking that somehow I would come to my senses and drop five grand."
To date, Ella has never received the money.
"You go through humiliation, embarrassment, you get into a really dark place because you feel like how could you be so stupid," she said.
"You don't want to tell your friends … you wouldn't even know where to start."
Another 54-year-old Sunshine Coast man recently lost $100,000 in a cryptocurrency scam, according to the Queensland Police Service.
He used a legitimate trading platform but was tricked into investing through a fake company that promised to set up his account in exchange for a greater return.
The man was told he would not be able to access the funds for 12 months, which Queensland Police said was a red flag.
"If you're running your own account, you can withdraw at any time," Sunshine Coast Senior Sergeant Craig Mansfield said.
"His funds have ended up in a wallet somewhere in the world that holds about $3 billion at the moment … who owns it? Who has access to it? No-one will ever know."
Michael Stefanon, from south-west Queensland, invested in cryptocurrency after seeing a "friend" endorse it on social media — but his friend had been hacked.
Initially, Mr Stefanon transferred $100 "to test the waters" and when it appeared as though he had made a good return, he became suspicious.
"I wanted to take that money out and put it back into my bank account and from there, this person was saying: 'Oh, you've got to upload more money to get access to your returns'," he said.
"She kept saying: 'Trust me, trust me, this will work' so I put in a little bit more."
Believing messages that appeared to be "professional and genuine", he transferred money via an online platform that he trusted.
Over a couple of days, the 35-year-old lost about $700 and is grateful it wasn't more.
"I felt a bit silly and wish I never got interested," Mr Stefanon said.
"I wouldn't trust anyone who contacts you on social media. I just don't think crypto is the best way of investing your money."
Queensland Police Service Financial Crime and Cyber Crime Group Acting Superintendent Michael Newman said crypto-scammers go to great lengths on social media to lure in their victims including stealing the identities of celebrities and even police officers.
"A lot of the ads that you actually see on there, where there's the likes of Matt Damon investing in cryptocurrency, a lot of times their images are actually being used without their knowledge," Acting Superintendent Newman said.
"We actually did see online there was an image of a police officer from far north Queensland and the ad read: 'Look at what this officer did, look at how they invested their money and they are a multimillionaire'.
"We did track down the officer involved and that officer had at no point ever given approval for their images to be used and neither had they actually invested in cryptocurrency the way it was actually being alleged."
Acting Superintendent Newman said cyber crime investigators were proactively trying to get these types of advertisements removed from social media.
"Actually investigating and prosecuting the person [who posts them] obviously becomes a lot more difficult, but we can start the prevention disruption work by actually having the obviously fake ads taken down," he said.
Dennis Desmond, a former FBI agent and cyber intelligence expert at the University of the Sunshine Coast, is not surprised more Queenslanders are getting caught out.
He said as cost of living pressures increased, people tended to look for quick returns.
"People [who] play the lottery, they'll go out and they'll try to find ways to earn additional funding," Dr Desmond said.
"They think that cryptocurrency offers this opportunity for them."
He said a lack of regulation and understanding meant "well-organised" criminal groups were getting involved.
"It's still the wild west out there," he said.
In an effort to tackle cybercrime nationally, the Joint Policing Cybercrime Coordination Centre (JPC3) was launched earlier this year as a hub for state and federal law enforcement and stakeholders, including AusTrac and the banking industry.
"We certainly see cybercrime as a threat that is increasing in scale and volume and really causing significant impact to the public," Cybercrime Operations Commander Chris Goldsmid said.
"We do have the capacity, the tools and expertise in the AFP to track and trace cryptocurrency. 
"Cryptocurrency transactions are not anonymous."
Suspicious activity and scams can be reported to your bank, ReportCyber and Scamwatch.
Commander Goldsmid urged people to be vigilant regardless of age or geographic location and to report suspicious activity early.
"People can feel a little bit embarrassed if they've been the victim of a scam or a cyber crime and that embarrassment can lead people to take some time before they think to call their bank or report it to police," he said.
"Earlier reporting is really pivotal if someone's gained access to your account or has successfully stolen money from you."
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