ASIC Says Most Crypto Scams Target Gen Z

• ASIC warned the public of the rising number of crypto scams leveraging social media ads and messaging platforms.
• A survey found that these scams mostly target Gen Z.

The Australian Securities and Investments Commission (ASIC) recently released a notice warning consumers of the growing use of social media platforms and messaging apps for crypto scams. The regulator revealed that most of these fraudulent activities target Gen Z.

Crypto Scams in Social Media and Messaging Apps

According to ASIC, the number of scammers using social media and messaging apps is rising. The agency specifically mentioned WhatsApp as a popular venue for their operations.

Typically, scammers leverage targeted social media advertisements and posts to lure potential victims. Then, the perpetrators encourage those engaging with the ads and posts to interact and sign up for a trading platform they have created themselves.

The bogus trading platform usually displays profits and active trades to attract victims. In reality, though, the data there are all fake.

Victims who invest in the trading platform in question initially see profits on their trades, which entices them to put more money in to raise their stakes, with the expectation of almost guaranteed returns.

Since the platforms neither conduct actual trading nor generate gains, the money customers invest goes straight into the scammers’ bank accounts. What’s worse, the bad actors also charge withdrawal fees whenever users attempt to withdraw their capital and earnings, thus amplifying the victims’ losses.

Additionally, ASIC highlighted that malicious actors use the same methods in pump-and-dump schemes. After that, they even demand recovery fees, preying on people hoping to get their investments back.

These scams are much like the modus of BG Wealth Sharing, which victimized investors across the US, Samoa, and the Philippines.

Targeting Gen Z

Citing research it conducted with Moneysmart, ASIC indicated that 72% of the 1,127 Gen Zers it surveyed said they have been receiving social media ads about crypto. Around 41% disclosed being contacted directly by someone urging them to invest.

Meanwhile, the same study found that 23% of the respondents owned crypto assets, including NFTs. Roughly 66% of them showed a short-term, speculative approach in managing their crypto investments.

Interestingly, 29% revealed following the short-term trading recommendations of social media influencers.

Avoiding Crypto Scams

ASIC reminded the public to engage only with regulated platforms listed on the government’s Virtual Asset Service Provider Register (VASPR). It’s to ensure the legitimacy of their crypto trading operations and to significantly mitigate the risk of falling victim to fraudulent transactions.

Furthermore, the regulator cautioned investors against being coerced into investing or disclosing their personal data. Likewise, it advised people to conduct due diligence and exercise common sense before diving into any form of investment.

ASIC urged victims of such scams to file a report with law enforcement authorities or via the government’s Scamwatch platform.

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