Australian cryptocurrency exchanges are increasingly communicating with their users as part of fraud prevention measures. According to the local cryptocurrency firm, this communication is key to preventing scams, as it is able to “break the trust between the victim and the scammer.”
Executives from major Australian cryptocurrency companies including Cointree, CoinSpot and Swyftx met on a panel at the Intersekt 2023 fintech conference in Melbourne on Aug. 31 to discuss scams and fraud in the cryptocurrency space.
During the panel discussion, executives mentioned the various measures the platform is taking to protect users from fraud, including automated and manual anti-money laundering (AML) checks, surveys, education and communication.
Jedda Stocks-Ramsay, a CoinSpot AML officer, said the firm is particularly focused on “talking directly” with customers because it has found that to be effective.
“We find that we talk to our customers at least once in their lifetime or in their lifetime,” says Stocks-Ramsay. Talking about scams is a key element, he noted, because there is a social engineering aspect to it.
Stocks-Ramsay said that CoinSpot is particularly committed to helping customers understand the problems of scammers trying to build trust with their victims. The executive emphasized that scammers often spend hours on the phone with their victims, and that a simple email from an exchange can help users avoid the situation entirely. He added:
“One of the really effective ways we’ve found to break that trust, or at least sow the seeds of doubt in victims, is to talk to them and give them the human element, because that’s what scams do.”
Swyftx executive Jason Titman pointed out that besides communication, education is another important component in protecting cryptocurrency users. He emphasized that the reason individual consumers are easily scammed and leak personal data and passwords to scammers is due to lack of education.
“It’s always been important because it’s a new asset class and we’ve been educating our clients on something very relevant and important in particular,” he noted.
Panel speakers also emphasized the importance of educating users outside the cryptocurrency industry.
Cryptocurrencies are “just one industry in the scam ecosystem,” Stocks-Ramsay said, adding that many other industries are involved in crypto scams, including social media, banking, telecommunications and more.
related: Thailand Threatens Facebook Over Crypto Scams, Other Fraudulent Ads
Cointree CEO Jess Renden agreed with the CoinSpot executive, emphasizing that cryptocurrency scams “are not the fault of cryptocurrency.” Cryptocurrency companies in Australia have been actively engaging with regulators and other businesses, whether it’s telcos or social media platforms, she said, adding:
“Our industry is constantly complaining that it’s our fault and it’s up to us. I think you’ve all seen today the steps we’ve taken to protect our customers.
A few months ago, major Australian banks argued that 40% of scams involved cryptocurrencies in order to defend the decision of some local banks to restrict some cryptocurrency transactions in early June 2023.
According to the Australian Competition and Consumer Commission, locals will lose around $150 million in 2022 from investments using cryptocurrencies as a form of payment. This figure represents an increase of more than 160% compared to 2021.
Additional reporting by Cointelegraph author Tom Mitchelhill.
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