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Summary
- ASIC has recorded a recent rise in crypto-related scams.
- Banks are not legally obligated to return customer’s money lost to crypto scams.
- Investors can take precautions to prevent falling victim to such fraudulent activities.
The Australian Securities and Investment Commission (ASIC) has recently seen a sharp increase in complaints related to cryptocurrency scams.
Last week, ASIC Commissioner Cathie Armour told a Blockchain Week event held in Sydney that industry assistance was required to help ASIC figure out the best approach to tackling issues related to digital currency.
ASIC Senior Regulatory Policy Professional Hema Raman added that the regulatory body acknowledges that the industry is keen for more specific guidance, further adding that ASIC is currently uncertain in matters surrounding the regulatory perimeter.
Ramen also said one of the barriers is that cryptocurrency assets are not a homogeneous asset class that can have consistent principles applied to them across the board.
ALSO READ: Crypto Safemoon Dives Leading to Scam Claims
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Banks Have No Legal Recourse
Financial analysts have warned that banks do not necessarily have recourse when customers complain of losing money to scams related to cryptocurrencies, such as Bitcoin. Also, investors should not expect banks to bail them out should they fall victim to such fraud.
In recent months, the rising value of Bitcoin has led to a surge of would-be investors falling victim to online schemes operated by offshore companies. The danger in doing business with offshore companies is these companies are not subjected to Australian legislation.
The result of this being that if an investor falls victim to a scam by an offshore company, the banks are under no legal obligation to intervene.
While banks may claim that they try to do everything they can to retrieve money lost by customers to online crypto scams, in reality, the banks are under no legal obligation to return any money lost to these scams.
DO READ: Safemoon hurtling to the moon; but is it really safe?
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Investors Need to Take Precautions
An investor can take some precautions to prevent losing money to crypto-related scams, including making sure that the website is not an imposter website. A common technique used by scammers is to build a website that looks identical to the actual company website. Investors should always look for a small lock icon near the URL bar. Moreover, if the address does not include ‘https’, caution should be taken.
Similar to fake websites, scammers can also use fake emails to lure investors. Investors are encouraged to make sure that the email address is connected to the company as scammers often announce fake initial coin offerings (ICO) as a way to part investors from their money.
