Australia issues warning on fake digital currency ads

Australia’s securities regulator has issued a warning regarding the rising number of fake digital currency ads as it continued to receive reports regarding the scams, with many relying on fake celebrity endorsements.

The Australian Securities and Investments Commission (ASIC) said the scams have been falsely using celebrities, government agencies and other prominent brands without their knowledge or consent. They then direct the victims to fake websites posing as digital currency trading bots or to pump-and-dump schemes.

Some of the celebrities whose images have been used include the former Premier for New South Wales Mike Baird and media personalities Waleed Aly, Virginia Trioli, Michael Rowland and David Koch.

The most common scams have been through fake digital currency trading sites which claim to use bots to achieve profitability. These include Bitcoin Trader, Bitcoin Revolution and Bitcoin Evolution. They target social media users with fake articles that tout their expertise in digital currency trading. They usually contain links to mirror sites that resemble legitimate news sites.

Victims who fall for the trap are then asked to deposit digital currencies or fiat and assured they will get huge profits. This never happens, with most of the sites not engaging in any trading at all. They simply manipulate the data to make it seem like the client is raking in profits.

The ASIC also cautioned against pump-and-dump schemes, where the fraudsters hype up worthless tokens using social media and other online avenues. This creates an illusion that the token is in high demand, drawing in a lot of investors. The token shoots up in price as a result. Once it hits a certain price, the fraudsters dump all their holdings, leading to an overnight price crash.

While it continues to fight the scammers, the ASIC revealed that it has found it very difficult to take down some as they are based overseas. This also makes it impossible to track and recover any money invested.

As CoinGeek reported, Facebook has been the biggest platform for the Australian scammers. According to a local report at the time, the social media platform had been a willing enabler of the scams. Despite many users reporting the scammers to Facebook, the company was unwilling to stop them, claiming that they hadn’t breached its terms and conditions.

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.