IFW Global is at the forefront of investigating cryptocurrency scams. Digital and virtual currencies secured by cryptography – cryptocurrencies – have been around for more than a decade now, and people from all walks of life have been legitimately using and trading this new type of currency for great rewards.
Although they’re often thought of as a new trend, cryptocurrencies have been in development for a long time. Bitcoin, the most well-known cryptocurrency, was launched in 2009. More than 2,000 cryptocurrencies are active on the international market.
Standard currencies (such as the Australian dollar) are centralised and regulated. These have a middleman (a bank or the government) to keep a record of how much currency is available and who has what. This helps to track fraud attempts, such as counterfeiting.
A cryptocurrency is a peer-to-peer trading system that has no middleman. Instead, all logs are recorded in a ‘blockchain’. People who own some of a particular cryptocurrency all keep track of payments and transfers of money. If person A sends a bitcoin to person B, every bitcoin owner is notified. The blockchain speaks to participants’ computers, and when they all agree on where the money is, an extra ‘block’ is added to the chain with updated balances and the whereabouts of the money.
Cryptocurrency Investment Scams
Cryptocurrency investment scams include Initial Coin Offerings (ICOs). These are ways that new cryptocurrencies fund their startup by offering new investors the opportunity to receive coin tokens in return for money. While legitimate ICOs do exist for the development of genuine cryptocurrencies, they are also a favourite mechanism used in cryptocurrency fraud.
As with any type of investment, malicious individuals and scam groups have found numerous ways to defraud well-meaning investors out of their hard-earned funds. The cryptocurrency trading market is rife with unregulated brokers who use dodgy tactics to steal investments or fleece investors out of more cash. Often these operatives work from call centres, usually based overseas, by cold calling people with enticing offers and promises of hot tips that will return high dividends.
IFW Global has received complaints about the following fraudulent investment companies.
One example cryptocurrency-related fraud is the advertisements you may have seen on popular social media platforms. These often show up on Facebook using photos of well-known celebrities such as Mel Gibson, to entice people into cryptocurrency investments. These scams are perpetrated by organised criminal gangs across the world, who prey on people’s lack of knowledge in this area.
Just like many types of investment fraud, cryptocurrency scams are often carried out internationally – sometimes across many jurisdictions. This is to limit and frustrate law enforcement in tracking scammers and to make it harder for investors to reclaim their money.
If located in Australia, these scams should be reported to the ACCC via its ‘report a scam’ page so others can be warned about current scams and they can be disrupted where possible. If you are located overseas, these scams need to be reported to your local authority.
If you’re the victim of a cryptocurrency scam, we want to help you. Please contact us to discuss your experience with cryptocurrency fraud.
IFW Global has a strong operations centre in the heart of Asia, which is the world’s largest hub for many types of cybercrime. We also have offices elsewhere around the globe in Europe, USA and Oceania.