Cryptocurrency is far from being the crowd pleaser, which explains why governments have taken regulatory strides to prohibit dealings with digital assets. While some countries have embraced the disruption that comes with virtual currencies, others are still on the adverse side of the technology. For Australia, however, the situation is ironic. The country was first crypto-friendly before anything else, doing as well as legalizing cryptocurrencies as a property in 2017.
Crypto exchanges were allowed to operate as long as they were registered under AUSTRAC, the country’s financial intelligence agency. Sadly, with the alarming rise of crypto-crimes in Australia, scammers are fueling the resolve of other anti-crypto countries to stand against cryptocurrencies and everything they represent.
Crypto-friendly or Crime-Friendly?
Crypto crimes like hacks and scams are not uncommon news in the cryptosphere, but it does begin to raise some brows when incessant news of said crimes come from one particular country. A report released by the ABC yesterday revealed that an Australian couple had lost over AU$20,000 (US$14,000) in a bitcoin scam, and that straw may as well have broken the proverbial camel’s back.
Per the report, Nick and Josie Yeomans invested in a trading scheme that they discovered on Facebook, reportedly dubbed Coinexx.org (a name similar to Coinexx.com). The couple received a good return on their investment, enough to have them draw out funds to invest more – at which point the purported firm clamped down on the funds and even taunted the couple in a WhatsApp message.
The Yeomans may be Australia’s latest victims, but they probably won’t be the last. In April, the country’s Competition and Consumer Commission revealed that cryptocurrency scams went up by 190% from the previous year, a wave that made Australian crypto users lose a total of $6.1 million Australian dollars ($4.3 million).
Most of the victims were reined in with promises of forex trading access, commodity trading and other investment opportunities in exchange for cryptocurrency payments. Of the said 6.1 million AUD, a total of 2.6 million AUD was lost this way.
Following this occurrence, the Australian Securities and Investments Commission (ASIC) made swift checks against suspicious websites and soon issued a warning to the Australian crypto community to steer clear of an alleged dubious entity dealing under two names, Dartalon Ltd and GFC Investments.
The ASIC had released similar warnings previously, against suspicious Initial Coin Offerings (ICOs) and crypto-asset funds targeted at retail investors. The watchdog even stopped five different ICOs from raising capital since April 2018, claiming that they did not meet security standards required to run such businesses.
ASIC followed by setting up MoneySmart – a website that investors could use for educating themselves on various financial matters before investing in ICOs.
The Ripple Effect of Crypto-Scams
When crypto crimes happen, outsiders are quick to recommend that the affected bodies should take preventive measures rather than corrective ones. However, with Australia’s regulations and security provisions, both for retail investors and cryptocurrency exchanges, it is hard to apportion blame and responsibility.
The growth of crypto crimes has since forced the Australian government to revise their stance towards cryptocurrency. In a June 20 article issued by the country’s Central Bank, it was declared that bitcoin (BTC) and other cryptocurrencies would not be allowed as mainstream payments.
“At the Australian level, there is definitely legitimate use for investment in cryptocurrencies, but we’re also seeing the use of them to facilitate tax crimes,” ATO deputy commissioner, Will Day had commented at the time.
It is impossible to weigh the full impact of this restriction presently, but one thing is certain – if a previously crypto-friendly country like Australia draws back on their crypto relations, it may be harder for other crypto-averse countries to change their minds about the digital assets, seeing as their worst fears about them are coming true. In the long run, this cannot be good for the growth of the crypto sector globally.