AUSTRALIAN WATCHDOG WARNS OF SPIKE IN CRYPTO SCAMS DURING CORONAVIRUS PANDEMIC

The COVID-19 pandemic brought unprecedented changes to our lives, impacting everything from our daily routines to the global economy.While many sectors struggled, the cryptocurrency market witnessed a surge in popularity. From 1 January, 2025 to 1 January, 2025, ReportCyber - Australia s online cybercrime reporting system operated by the Australian Cyber Security Centre (ACSC) - received 150 unique reports of scams involving crypto ATMs, with an estimated loss of $3,107,600.Unfortunately, this increased interest also attracted malicious actors, leading to a significant rise in crypto-related scams.The Australian Securities and Investments Commission (ASIC), the country's corporate watchdog, has raised serious concerns about this alarming trend.With reports of investment scams increasing by 20% during the pandemic compared to the previous year, ASIC is actively warning Australians to be vigilant and cautious when investing in digital assets.

This article delves into the details of ASIC's warning, exploring the types of crypto scams on the rise, the factors contributing to their proliferation, and practical steps Australians can take to protect themselves from becoming victims.We'll also examine the role of crypto ATMs in facilitating these scams and the measures being taken by authorities to combat this growing threat.Understanding the landscape of crypto scams is crucial for anyone considering investing in this volatile but potentially rewarding market.Let's explore how you can stay safe in the ever-evolving world of digital finance.

The Rise of Crypto Scams in Australia

The Australian Securities and Investments Commission (ASIC) has been actively monitoring the increase in investment scams, with a particular focus on those involving cryptocurrencies. In just two years, the number of crypto ATMs in Australia increased more than 15 times, from just 23 operating in 2025, 60 in 2025, to more than 1,200 in 2025. There are now upwards of 1,800 active crypto ATMs. AUSTRAC has projected that almost 150,000 transactions occur annually, with about $275m being moved using crypto ATMs.The regulator has observed a significant uptick in reports of misconduct related to crypto-assets since the onset of the coronavirus pandemic.This coincides with a broader increase in investment scams across the board, highlighting the vulnerability of individuals during times of uncertainty and economic instability.

Data from ASIC reveals that reports of misconduct rose by 20% between March and May 2025, compared to the same period in 2024.This alarming statistic underscores the urgency of ASIC's warnings and the need for increased public awareness regarding crypto scams. کمیسیون امنیت و سرمایه گذاری استرالیا (ASIC)، عنوان کرد که میزان کلاهبرداری در حوزه سرمایه گذاری درFraudsters are capitalizing on the fear and uncertainty surrounding the pandemic to lure unsuspecting investors into fraudulent schemes.

Common Types of Crypto Scams

Understanding the different types of crypto scams is essential for protecting yourself from becoming a victim.Here are some of the most common tactics used by scammers:

• Giveaway Scams: These scams often involve promises of free cryptocurrency in exchange for sending a small amount of crypto to a specific address.Scammers impersonate well-known figures or organizations to appear legitimate, but victims never receive the promised giveaway.
• Rug Pulls: In a rug pull scam, developers create a new cryptocurrency or token and artificially inflate its price through marketing and promotion.Once the price reaches a certain level, the developers sell their holdings and disappear, leaving investors with worthless tokens.
• Phishing Scams: Phishing scams involve deceptive emails, messages, or websites that mimic legitimate platforms or services.Scammers use these tactics to trick users into providing their personal information, such as passwords or private keys, which can then be used to steal their cryptocurrency.
• Impersonation Scams: These scams involve impersonating a high-profile cryptocurrency exchange or individual.Scammers may use fake websites, social media accounts, or even phone calls to convince victims to send them cryptocurrency or provide sensitive information.
• Investment Scams: These scams often involve promises of high returns on cryptocurrency investments with little or no risk. Australian Watchdog Warns of Spike in Crypto Scams During Coronavirus Pandemic Australia s Securities and Investment Commission says that between March and May, investment scams of all types rose by 20% as compared to the same period in 2025Scammers may use complex jargon and technical details to appear credible, but the underlying investments are often fraudulent or non-existent.
• Crypto ATM Scams: Scammers instruct victims to deposit cash into crypto ATMs to purchase cryptocurrency, which is then sent to the scammer's wallet. Mentioning: 6 - Blockchain and cryptocurrency adoption has increased significantly since the start of the Covid-19 pandemic. This adoption rate has overtaken the Internet adoption rate in the 90s and early 2025s, but as a result, the instances of crypto scams have also increased. The types of crypto scams reported are typically giveaway scams, rug pulls, phishing scams, impersonation scamsThese scams often involve impersonation, romance scams, or investment scams.

The Role of Crypto ATMs in Facilitating Scams

The proliferation of cryptocurrency ATMs in Australia has unfortunately contributed to the rise in crypto scams.These machines, while offering convenient access to cryptocurrency, can also be exploited by scammers to facilitate fraudulent transactions.

The Rapid Growth of Crypto ATMs

The number of crypto ATMs in Australia has exploded in recent years. The widespread acceptance of cryptocurrency by business and its growing popularity have contributed to the spike in crypto scams. In a warning published on its website said : Fraudsters are leveraging increased fear and uncertainty during the COVID-19 pandemic to steal your money and launder it through the complex cryptocurrency ecosystemFrom a mere 23 operating in 2021, the number surged to 60 in 2022 and then skyrocketed to over 1,200 in 2023. The Australian Securities and Investment Commission (ASIC) has warned against the increasing rate of frauds, particularly crypto scams in Australia. The regulator noted that these fraudulent activities has been surging in the country, following the outbreak of the coronavirus few months ago.Currently, there are upwards of 1,800 active crypto ATMs across the country.AUSTRAC estimates that approximately 150,000 transactions occur annually through these machines, with around $275 million being moved.

How Scammers Exploit Crypto ATMs

Scammers often instruct victims to deposit cash into crypto ATMs to purchase cryptocurrency, which is then sent to the scammer's wallet. MR Rise in investment scams during COVID-19 pandemic ASIC has seen a rise in the number of investment scam reports from Australian consumers and investors during the COVID-19 (coronavirus) pandemic. Reports of misconduct received by ASIC from March to May 2025 are up 20% compared to the same period last year.This method is particularly effective because it allows scammers to remain anonymous and difficult to trace.Victims are often coerced into using crypto ATMs through impersonation scams, romance scams, or investment scams.

ReportCyber, Australia's online cybercrime reporting system, received 150 unique reports of scams involving crypto ATMs from January 1, 2025, to January 1, 2025, with an estimated loss of $3,107,600. 豪州の証券投資委員会（ASIC）は、新型コロナウィルスのパンデミックによって投資詐欺が急増していると報告している。特に仮想通貨関連の詐欺が懸念事項となっている。This highlights the significant financial impact of these scams and the need for increased awareness and preventative measures.

Why Are Crypto Scams on the Rise?

Several factors contribute to the increasing prevalence of crypto scams:

• Increased Adoption of Cryptocurrency: The growing popularity of cryptocurrency has attracted a wider range of investors, including those who may be unfamiliar with the risks and complexities of the market. The Australian Securities and Investment Commission (ASIC) has identified a sharp rise in investment scams during the coronavirus pandemic and has singled out crypto-related fraud as aThis makes them more vulnerable to scams.
• Lack of Regulation: The cryptocurrency market is still relatively unregulated, which allows scammers to operate with greater impunity. ASIC has seen a rise in the number of investment scam reports from Australian consumers and investors during the COVID-19 (coronavirus) pandemic. Reports of misconduct received by ASIC from March to May 2025 are up 20% compared to the same period last year.The absence of clear regulatory frameworks makes it difficult to track down and prosecute perpetrators.
• Anonymity: Cryptocurrency transactions can be difficult to trace, making it easier for scammers to conceal their identities and launder illicit funds.
• Complexity: The technical complexities of cryptocurrency can be confusing for newcomers, making them more susceptible to scams that exploit their lack of knowledge.
• Fear and Uncertainty: Economic downturns and global crises, such as the COVID-19 pandemic, create an environment of fear and uncertainty that scammers can exploit.

Protecting Yourself from Crypto Scams: Practical Tips

While the landscape of crypto scams may seem daunting, there are several steps you can take to protect yourself:

1. Do Your Research: Before investing in any cryptocurrency, thoroughly research the project, the team behind it, and the underlying technology. Following the World Health Organization (WHO, we used two indicators- the logarithm of persons affected by COVID-19 and the logarithm of persons died by COVID-19- to proxy this pandemic. The list of cryptocurrencies includes 9 famous cryptocurrencies namely Cardano, BNB, Bitcoin, BUSD, Dogecoin, Ethereum, Coin, Tether and XRP whose evolutionBe wary of projects that lack transparency or have unrealistic promises.
2. Be Skeptical of Unsolicited Offers: Be cautious of unsolicited emails, messages, or phone calls offering investment opportunities or free cryptocurrency.Scammers often use these tactics to lure victims into fraudulent schemes.
3. Verify Information: Always verify information from multiple sources before making any investment decisions.Don't rely solely on information provided by promoters or marketers.
4. Use Strong Passwords: Use strong, unique passwords for all your cryptocurrency accounts and wallets. During COVID-19, ASIC has seen an increase in reports from consumers losing money in crypto-asset (or cryptocurrency) scams. Reports of misconduct received by ASIC from March to May 2025 are up 20% compared to the same period last year.Enable two-factor authentication (2FA) for added security.
5. Store Your Cryptocurrency Safely: Store your cryptocurrency in a secure wallet that you control.Consider using a hardware wallet for added security.
6. Be Wary of Promises of High Returns: Be skeptical of investments that promise high returns with little or no risk.If it sounds too good to be true, it probably is.
7. Never Share Your Private Keys: Never share your private keys with anyone. This paper analyses the most significant blockchain and cryptocurrency scams since the start of the Covid-19 pandemic, with the aim of raising awareness and contributing to protection against attacks.Your private keys are like the password to your cryptocurrency, and anyone who has them can access your funds.
8. Report Suspicious Activity: If you suspect that you have been targeted by a scam, report it to the relevant authorities, such as ASIC or the Australian Cyber Security Centre (ACSC).
9. Be Careful Using Crypto ATMs: Avoid using crypto ATMs if you've been instructed to do so by someone you met online, especially if they're pressuring you.Always be wary of requests to deposit large sums of cash into these machines.

The Role of Authorities in Combating Crypto Scams

Australian authorities are actively working to combat the rise in crypto scams through various measures:

• Public Awareness Campaigns: ASIC and other agencies are conducting public awareness campaigns to educate Australians about the risks of crypto scams and how to protect themselves.
• Law Enforcement: The Australian Federal Police (AFP) and other law enforcement agencies are investigating and prosecuting individuals involved in crypto scams.
• Regulatory Measures: The Australian government is exploring regulatory frameworks for the cryptocurrency market to provide greater consumer protection and deter fraudulent activity.
• International Cooperation: Australian authorities are collaborating with international counterparts to combat cross-border crypto scams.

ASIC's Ongoing Efforts to Protect Investors

ASIC is committed to protecting Australian investors from the risks of crypto scams.The regulator is actively monitoring the cryptocurrency market, issuing warnings about potential scams, and taking enforcement action against individuals and entities engaged in fraudulent activity.

ASIC's efforts include:

• Issuing alerts and warnings to the public about specific crypto scams.
• Providing guidance and information to investors about the risks of cryptocurrency.
• Working with law enforcement agencies to investigate and prosecute crypto scams.
• Advocating for stronger regulatory frameworks for the cryptocurrency market.

The Impact of COVID-19 on Crypto Scams

The COVID-19 pandemic has had a significant impact on the prevalence of crypto scams. In our recent paper, we conducted an empirical analysis to test how the outbreak of the Covid-19 pandemic affected the market for cryptocurrencies ( cryptomarket ). One year into the pandemic, this market seems to have boomed.The increased fear and uncertainty surrounding the pandemic, coupled with the growing popularity of cryptocurrency, have created a perfect storm for scammers. Australian Federal Police have issued a serious warning to cryptocurrency customers after identifying an alarming number of victims who have been deceived through impersonation scams.As people spend more time online and seek alternative investment opportunities, they become more vulnerable to fraudulent schemes.

Chainalysis's Perspective

While ASIC has highlighted the increase in crypto scams during the pandemic, Chainalysis, a blockchain analytics firm, offered a slightly different perspective. The Australian Securities and Investments Commission (ASIC) announced this Wednesday that it has seen an uptick in the number of investment scam reports from consumers and investors within Australia during the coronavirus pandemic.They attributed the rise in scams partly to the cryptocurrency market collapse in mid-March 2020, suggesting that concerns about COVID-19-themed scams might be exaggerated.Nevertheless, the overall increase in fraudulent activity remains a significant concern.

The Future of Crypto Regulation in Australia

The Australian government is actively considering regulatory frameworks for the cryptocurrency market. Consumer complaints to the corporate watchdog had spiked by 20 per cent during the COVID-19 pandemic, ASIC chairman James Shipton told a parliamentary committee.The goal is to provide greater consumer protection, deter fraudulent activity, and promote responsible innovation.Potential regulatory measures include:

• Licensing requirements for cryptocurrency exchanges and other service providers.
• Anti-money laundering (AML) and counter-terrorism financing (CTF) regulations for cryptocurrency transactions.
• Disclosure requirements for cryptocurrency investments.
• Consumer protection laws to protect investors from fraud and misrepresentation.

Conclusion: Staying Safe in the Crypto World

The surge in crypto scams during the coronavirus pandemic is a serious concern for Australian investors. Authorities have hit send on a text and email blitz to warn Australian cryptocurrency customers about scammers impersonating a high-profile exchange.The Australian Securities and Investments Commission (ASIC) has rightly warned about the increased risks and is actively working to protect consumers.By understanding the different types of scams, taking proactive steps to protect yourself, and staying informed about the latest developments in the cryptocurrency market, you can significantly reduce your risk of becoming a victim.

Remember to always do your research, be skeptical of unsolicited offers, and never share your private keys with anyone.Report any suspicious activity to the relevant authorities and stay vigilant in the ever-evolving world of digital finance.While the potential rewards of cryptocurrency investment can be substantial, it's crucial to prioritize safety and security to avoid falling prey to scammers.

Key Takeaways:

• Crypto scams have increased significantly during the COVID-19 pandemic.
• ASIC is actively warning Australians about the risks.
• Be aware of common scam types, such as giveaway scams, rug pulls, and phishing scams.
• Take proactive steps to protect yourself, such as using strong passwords and storing your cryptocurrency safely.
• Report any suspicious activity to the relevant authorities.

Investing in cryptocurrency can be exciting, but it's crucial to approach it with caution and knowledge.By staying informed and taking the necessary precautions, you can navigate the crypto world safely and responsibly.