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Common Crypto Scams in Australia & how to avoid them

We have noticed a remarkable surge in crypto scams in Australia and have collected the most common ones to help protect you and your assets. 

Before we get started, if you feel like you might have been scammed or something feels bad, contact our Support Team immediately. Don’t feel embarrassed, we’re here to help. It’s always better to be safe and sorry. Alternatively, the Australian Cyber Security Centre’s guidelines also provide information on what to do next. 

While crypto scams can involve various cryptocurrencies, Bitcoin is the most commonly used due to its status as the first and largest cryptocurrency. 

First, it’s important to know how crypto works compared to using fiat money to buy, trade, deposit or withdraw. 

Basic Crypto Knowledge

  1. No middle man
    1. Crypto transactions are peer-to-peer. There is no middleman like a bank involved. This means nobody keeps an eye on transactions and could spot and potentially block if something doesn’t look right. 
  2. Traceable
    1. Every transaction is recorded on the blockchain which makes it traceable. However, it’s extremely difficult to verify the true identity of wallet holders.
  3. Not retrievable
    1. Once crypto has been sent to somebody, it cannot be retrieved or taken back. 
    2. When you use your credit card to buy something that you then realise is a scam, your bank provider could potentially refund you that money. 
    3. That is not possible with crypto, so you have to stay extra vigilant everytime you make a transaction. 

Second, it’s important to remember these six rules for crypto. 

Six Golden Rules for Crypto

  1. Triple Check Digits
    1. Always verify the first and last 3-5 digits of wallet addresses before transferring crypto.
  2. Know Your Receiver
    1. Only send crypto to people or groups you know personally. Casual social media chats or calls aren’t enough when it comes to your money.
  3. Official Contacts Only
    1. Virgo contacts you only via phone and email. Our emails end with @virgo.co – any other contact, especially on social media, is a scam.
  4. Sceptical of Promised Returns
    1. Be wary of guaranteed investment returns, especially if they sound too good to be true.
  5. Verify Without Hesitation
    1. Don’t be embarrassed to verify someone’s credentials. Legitimate companies will never be upset if you take the time to ensure their authenticity.
  6. Trust Your Instincts: If something feels off, it probably is. Don’t hesitate to walk away.

This video might help you remember the first rule: 

HODL: a Bitcoin short film shot on the Ursa Mini Pro G2

Identified Scammers

  1. BluestarFX: https://moneysmart.gov.au/check-and-report-scams/investor-alert-list#!blue-stars-fx-bluestarsfx-com–1605
  2. Alpha Ai Trade: https://moneysmart.gov.au/check-and-report-scams/investor-alert-list#!alphaai-trading-alphaaitrade-com–2117
  3. Ultimate Traders: https://moneysmart.gov.au/check-and-report-scams/investor-alert-list#!ultimate-traders-ultimate-traders-com–1884
  4. MEXC: https://moneysmart.gov.au/check-and-report-scams/investor-alert-list#!mexc-global-www-mexc-com–2042
  5. Travel Operation
  6. RMX Group
  7. We On Asset (Renamed to GreenGlobalFX): https://moneysmart.gov.au/check-and-report-scams/investor-alert-list#!weonasset-weonasset-io–2110
  8. Currency Arena FX: https://moneysmart.gov.au/check-and-report-scams/investor-alert-list#!https-currencyarenafx-com-1389
  9. Solo-fx.com
  10. Macro Trade (clientzone.macro-trade): https://moneysmart.gov.au/check-and-report-scams/investor-alert-list#!macro-trade-clientzone-macro-trade–1606
  11. Rise-Up Trading: https://www.fma.govt.nz/library/warnings-and-alerts/riseup-trade-suspected-scam/

    If you’re currently engaged with any of the above parties, please DO NOT send any cryptocurrencies to them and report to us via [email protected]

Types of Scams

Scams tend to be quite creative and ever changing, however, they mostly belong to one of these types. The Australian Cyber Security Centre also provides a list of different scams. 

7 Most Common Types of Crypto Scams 

Impersonating / Phishing

Definition

Scammers impersonate legitimate representatives of banks, government agencies or organisations like Virgo in order to get personal information from you. 

They may try to get user name, password, two factor authentication codes or other information from you.  

Scammers may impersonate representatives from the ATO to discuss your crypto taxes. Be cautious and avoid clicking on any links directly. When in doubt, consult Virgo’s 2024 Ultimate Australia Crypto Tax Guide or check out the ATO’s guidelines for crypto tax.  

Consequences 

Once scammers have access to sensitive data, such as your crypto wallet, they can change the account’s email address, withdraw crypto to another wallet and empty your complete wallet. 

Prevention 

  • Never provide any personal or financial information over the phone. Be wary of unsolicited calls, emails, SMS, or social media direct messages requesting sensitive information. 
  • Never click any links in text messages or emails. 
  • Always verify the identity of the caller by contacting the organisation directly using official contact details.
  • Resist the urgency in their calls, emails or texts. We would never contact you about account suspension or unauthorised transactions over text

Phishing Channels 

There are different channels on how phishing might take place: 

  • Phone
    • Ask for their name and check with the company directly to make sure that individual works for the company
  • Email
    • Check that the email address has the correct and official ending. For Virgo this is @virgo.co 
  • SMS
    • Check the phone number and get in touch with our Customer Support to double check the authenticity. 
  • Social media messages / dms
    • Virgo is never going to contact you about your account on social media. Our official social media channels are Instagram, X, LinkedIn but we will never direct message you first. 

Crypto investment scams

Definition

Investment scams with crypto promise incredibly high returns with almost no risk. Scammers use persuasive tactics and fake credentials to appear legitimate, such as:

  • Sky-High Returns: Boasting unbeatable profits that seem too good to pass up.
  • Zero Risk Claims: Promising no chance of losses – a foolproof investment.
  • Urgent Offers: Pressuring you with “limited time” deals that scream “Act Now!”
  • Success Stories: Flaunting fake testimonials of people making fortunes overnight.

Consequences

Victims are convinced by the offer and withdraw their crypto assets to the scammer hoping for amazing profits. However, in most cases they will never return any return and their investment is lost. 

Nevertheless, there are also other cases where initially, investors will get a return, just to make them invest even more the next time as they now trust in the investment. This can be repeated several times, until the person organising the investment will stop replying and the money is gone. 

Prevention

  • DYOR (Do Your Own Research): Be a detective before diving in.
  • Scepticism Saves: Don’t buy into promised returns – no one can predict the crypto market.
  • Credential Check: Verify the legitimacy of the investment and its promoters.
  • Google is Your Friend: Look up the investment and the people behind it, and read reviews.

Romance Scams

Definition

Fraudsters create fake profiles on dating sites and social media to establish romantic relationships with victims. Over time, they gain the victim’s trust and request money for various fabricated emergencies or travel expenses.

Consequences

Victims often suffer significant financial losses and emotional heartbreak. The betrayal of trust can lead to long-lasting psychological effects and a reluctance to engage in future relationships.

Prevention

  • Guard Your Heart: Be cautious with online connections, especially if they profess love quickly or ask for money.
  • Face the Truth: Verify identities through video calls and stay sceptical. 
  • Red Flag Alerts: Be wary of stories about sudden emergencies or unexpected financial needs.
  • Research & Reassure: Check their social media profiles and online presence for consistency and authenticity.
  • Believe Your Friends: If your friends tell you this might not be true or to be cautious, listen to them. 

Giveaway Scams

Definition

Giveaway scams trick victims into believing they have won a prize or are eligible for a free product, often requiring them to provide personal information or pay a small fee to claim the reward. These scams are prevalent on social media and email.

Consequences

Victims can lose money and personal information, which scammers can use for identity theft or further fraudulent activities. 

Prevention

  • Too Good to Be True?: Be sceptical of surprise prize messages, especially if you didn’t enter a contest.
  • Official Channels Only: Verify giveaways by checking official websites and contacting the company directly.
  • No Fees, No Fuss: Real giveaways won’t ask for payment to claim your prize.
  • Double-Check Links: Inspect URLs and email addresses for legitimacy before clicking.
  • Beware of Pressure: Legitimate giveaways won’t rush you to claim a prize immediately.

Fake Websites

Definition

Fake websites are fraudulent sites designed to look like legitimate websites, such as Virgo, banks or other service providers. They aim to steal personal information, login credentials, or payment details from unsuspecting visitors.

Consequences

Victims who provide information to fake websites can suffer financial losses, identity theft, and malware infections. 

Prevention

  • Check the URL: Always ensure the website address starts with “https://” and look for the padlock icon indicating a secure connection.
  • Verify the Domain: Be cautious of slight misspellings or unusual domain names that mimic legitimate sites.
  • Look for Reviews: Search for user reviews and ratings to confirm the website’s legitimacy.
  • Trust Your Browser: Pay attention to warnings from your browser about potentially unsafe sites.
  • Research the Company: Verify the company’s contact information and look for a physical address and customer service number.

Fake Apps

Definition

Fake apps mimic legitimate applications to trick users into downloading them. 

Consequences

Once installed, these apps can steal personal information, install malware, or charge users for services they didn’t request.

Prevention

  • Stick to Official Stores: Download apps only from trusted sources like the App Store or Google Play.
  • Check the Developer: Verify the app developer’s credibility and look for other apps they’ve created.
  • Read Reviews: Look at user reviews and ratings for red flags or common complaints.
  • Permissions Alert: Be wary of apps requesting excessive permissions unrelated to their function.
  • Update Regularly: Keep your apps and device software updated to protect against vulnerabilities.

Copy Paste Malware

Definition

Copy paste malware modifies clipboard content to change information such as wallet addresses, leading victims to send funds to the scammer’s account instead of the intended recipient.

Consequences

Victims can lose cryptocurrency or other valuable data intended for legitimate transactions. This type of malware can cause significant financial loss and disrupt business operations.

Prevention

  • Double-Check Paste: Always verify pasted content, especially wallet addresses, before finalising transactions.
  • Use Antivirus Software: Keep reliable antivirus software active to detect and block malware.
  • Be Cautious with Downloads: Avoid downloading software or files from untrusted sources.
  • Update Your System: Regularly update your operating system and software to patch security flaws.
  • Disable Clipboard Sharing: Turn off clipboard sharing features between devices to reduce risks.

Conclusion 

In conclusion, as the world of cryptocurrency continues to evolve, so do the tactics of scammers. It’s crucial to remain vigilant and aware of the potential risks. If you ever suspect you’ve encountered a scam, don’t hesitate to reach out to customer support for guidance and assistance. 

Remember, there is no shame in taking steps to protect yourself – asking questions and verifying information are smart and necessary actions. Trust your instincts; if something feels off, it probably is. Staying informed and cautious can help you navigate the crypto landscape safely and confidently.