Over 60% of all scams are related to digital currencies: Austrian regulator

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The Austrian financial watchdog has revealed that cryptocurrency-related scams have shot up in the Central European country. They accounted for close to two-thirds of all financial scams in the past year, the regulator according to authorities.

The Financial Markets Authority (FMA) stated that it saw a record in whistle-blower reports of potential fraud in 2020. As Bloomberg reports, digital currencies were the main focus of most reports. Over 60% of all financial fraud in Austria last year was tied to digital currencies.

FMA spokesperson Klaus Grubelnik said that scammers have mainly targeted social media users. They promoted their scams on WhatsApp, Facebook, Telegram and TikTok, he said, and this made them more difficult to stop for the regulator. With digital currencies being global, investigations are also more complicated as they span across jurisdictions.

“We see a great need for stricter regulation. Fake offerings for stocks and gold have been around forever and these scams are now shifting to digital assets because of the hype,” he told Bloomberg.

The Austrian digital currency ecosystem has continued to grow despite the scammers. Many global exchanges have a presence in the nation, including Coinbase, Bitstamp, CEX and eToro.

The FMA has continued to crack down on digital currency scammers, identifying unlicensed companies and warning the public. They include RaxTrade which offered users 125 assets to trade at zero commission. It has also warned against PremiumBorsa, Pennyworth Investments, ANB Bank and GCG 24.

The Austrian government has also been promoting the adoption of digital currencies. As far back as 2019, the Finance Minister Hartwig Loeger announced he would create a regulatory sandbox in fintech, including digital currencies. The Austrian government pledged to partner with the U.K.’s Financial Conduct Authority on the initiative.

Digital currency crime is still rampant, despite going down by over 50% in 2020. As per a Chainalysis report, it accounted for 0.34% of all digital currency transactions at $10 billion. In the previous year, it had accounted for 2.1% at $21.4 billion. Chainalysis revealed that scams were the most common crimes, although they had declined by 72%. Ransomware attacks had recorded the highest growth, shooting up by 311%.

See also: CoinGeek Live panel, Digital Currency & Global Compliance: Tools & Tips for Exchanges, Wallets & Other Service Providers