Cryptocurrency has been around for a while now, grabbing headlines, causing confusion, and fuelling controversy. From Bitcoin, the one that everyone knows to Dogecoin, the cryptocurrency joke that became a powerhouse overnight, these cryptocurrencies are making huge gains in the public’s imagination. While debates around the value of a decentralised currency and the uses of the tech behind it are raging, it’s also important to be aware that it’s become the latest IT scam on the market. In this article, we’re taking a look at these scams, the most common forms they take, and how you can better protect yourself and your organisation from becoming a victim.

What is Cryptocurrency?

This is a digital, decentralised currency that can be used for online payments. They use a technology called blockchain, which spreads the data across many computers, recoding transactions and offering exceptional security. There are thousands of cryptocurrencies on the market, fluctuating in value as people buy and exchange these tokens, and seen by many as the future of currency because of their security, their lack of attachment to central banks, and as a way to get returns.

Different Types of Crypto Scams

Just as with traditional financial transactions, there is the ability to commit fraud using cryptocurrency, usually playing on people’s desire to make exceptional returns with a small investment. The scams are sophisticated, look legitimate, and are very dangerous not only because you can be scammed out of money, but because some scams are used to access sensitive personal or business financial information.

The most common types of crypto scams include:

  • Advance fee schemes – In these schemes, which are also called 419 schemes, a legitimate-seeming contact will offer you goods, a job, or money but first, require you to pay a fee upfront to qualify. These are creative schemes that often tell you that you’ve won a lottery prize, are an heir to a legacy or are in line for employment and that they need you to make a crypto payment to facilitate the transaction.
  • Celebrity impersonation crypto schemes – These are schemes that rely on you trusting a celebrity or respectable person’s endorsement to access your money. For example, a scam may say that a prominent person is backing this cryptocurrency, when they have nothing to do with it in reality, making you feel more secure about investing. Again, these look very legitimate. Here’s a good example that used Dick Smith, Andrew Forrest, and others.
  • Investment schemes – Investment schemes promise returns far above and beyond other investments. They are often framed to make them more socially appealing, showing testimonials about how much certain people have made or framing it as a caring community. They often pressure you to sign on quickly to avoid missing out and ask you to bring in other investors alongside you to participate. Here’s a good example of a crypto investment scheme that cheated millions of investors out of huge sums of money.
  • Fake giveaways – These scams tell you that you have limited time to get in on a great free giveaway, pressuring you into acting quickly without properly researching whether the offer is legitimate or not. Recently, a fake Elon Musk tweet saying that the tech mogul was giving away free cryptocurrency cost one person over $720,000.

Over the last year or so, the Australian Securities & Investment Commission (ASIC) has seen a surge in reported crypto scams. Protecting yourself and your organisation means taking steps to:

  • Educate employees on how common scams work, what to do if they see a scam, and how to protect themselves and their work devices.
  • Implementing real-time URL scanning capability to detect and block malicious links.
  • Practice safe browsing and emailing per your IT security policies.
  • Practice caution. If something looks too good to be true, it is. Don’t click on links that look remotely suspicious. Don’t get pressured into making a financial decision. Know who to talk to and what to do if your device is compromised.
  • Report it to your bank or financial institution and lodge a report of misconduct with ASIC.

At Otto, we’re here to protect your organisation and your people against IT scams and other IT security risks. We’ll help you educate your team, ensure you have the best IT protection for your business and be ready to act if your data or people are compromised. Talk to us today about IT security and data security for your business.