“On my TikTok, there are constantly some new Fred Schebesta coming in and asking people to WhatsApp them about a new hot cryptocurrency project,” says Finder CEO Fred Schebesta (the real one).
“It looks like a scam, and it almost always is, but it’s very difficult to stop bots. It just happens constantly. “
‘I do not accept phone calls, I do not click on emails, I do not answer text messages anymore.’
Finder CEO Fred Schebesta
Like Green, Schebesta has had its identity stolen and used to sign up for purchases now, pay later products. He has also had particularly ambitious scammers trying to set up mailboxes in his name, tactics that have forced the founder to be very careful when accepting calls and messages.
“I do not accept phone calls, I do not click on emails, I do not answer text messages anymore unless I know who you are,” he says.
The Australian Competition and Consumer Commission (ACCC) is generally running a tight ship when it comes to tracking and alerting people to fraud, with its ScamWatch department tracking 18,000 different scam reports in November alone.
However, the regulator admits that their data on the kind of counterfeiting scams that plague the cryptocurrency space is limited. “It’s not the most common form of these scams we see, but it’s certainly among those that have been reported,” said Vice President Delia Rickard.
Rickard says the regulator has a handful of case studies where victims have fallen for these scams, giving examples of how high-profile crypto personalities such as Ethereum founder Vitalik Buterin and Tesla founder Elon Musk were imitated, with fraudsters taking between $ 2,000 and $ 6,000 . in cryptocurrency from the victims.
“It’s an awful lot of money to lose,” she says. “The whole investment theory of ‘do not put all your eggs in one basket’ seems to go out the window when people get involved in crypto.”
She sees these scams as a new-age version of the classic celebrity imitation scam, in which scammers try to lure victims into fraudulent investments with the supposed backing of a high-profile celebrity who has become easier to pull off due to the unregulated and unpredictable. the nature of the cryptocurrency space.
“Since you can get scammers operating on legitimate exchanges, I think it’s very difficult for people to know how to approach it,” she says. “So that’s why they see names they trust and think it’s a safer move.”
The ACCC hopes to inform more people about the dangers of these scams, and is also working closely with banks in an effort to stop money being transferred to scammers before it is too late. However, the power of the regulator beyond that is limited, leaving much of the action to the social media platforms that allow these scammers to operate.
In the early days of the crypto boom, this was predominantly Twitter. However, the company has taken significant steps to prevent these scams from spreading, and a spokesman said it “constantly adapted to the evolving methods of bad actors”. In Australia, the promotion of cryptocurrencies on Twitter is only allowed with the prior permission of the platform.
Many of these scammers have since moved to more private services like Telegram and Discord, where they can send messages to potential victims one-on-one.
A spokesman for Discord said the company is taking action against any illegal activity on its app, including banning users and shutting down servers. The company has also rolled out various fraud protection tools such as registration of suspicious links and services that monitor for suspicious activity from new users.
Similarly, a spokesman for Meta – Facebook and Instagram’s parent company – said the company had a team dedicated to identifying and preventing this kind of scam.
“While no enforcement is perfect, we continue to explore new technologies and methods to stop these scams and the people behind them,” they said.
The unfortunate reality in the cryptocurrency sector, however, is that it is far more difficult to prevent fraud compared to the traditional financial field, as the key principles of decentralization and anonymity are both what make cryptocurrency great, but also enable fraudsters to thrive. .
Rickard says crypto fraud has generally gone “through the roof” through COVID, as more people have been stuck at home on their computers. She owes part of this to the hype associated with the sector, where some desperate investors are willing to take risks so they do not miss the crypto boom.
“I really think we’re seeing this mentality with people watching everyone who made a fortune in the first boom,” she says. “So they really want to be part of the second-best, big thing.”