To reduce scams, Australian cryptocurrency exchanges have frequently engaged with their members. Some local businesses have said this engagement and breaking trust is key to averting crypto scams, especially between victims and scammers.

On August 31, executives from prominent Australian cryptocurrency companies like Cointree, CoinSpot, and Swyftx gathered during a panel of the fintech conference Intersekt 2023 in Melbourne to examine the problem of fraud and scams in the cryptocurrency industry.

The executives at the panel discussed several steps that the platforms have taken to safeguard their users from fraud, including Automatic and Manual anti-money Laundering (AML) checks, investigations, education, and communication.

Breaking Trust is Key to Averting Crypto Scams – Talking to Clients (Communication)

Breaking Trust is Key to Averting Crypto Scams

CoinSpot AML officer Jedda Stocks-Ramsay claims that the company has emphasized “just talking” to its clients since it believes this method to be quite successful.

“We’ll speak to our customers at least once throughout their life or the course of their account with us,” Stocks-Ramsay said. He pointed out that it is crucial since discussing fraud has a social engineering component.

According to Stocks-Ramsay, CoinSpot has placed a particular emphasis on assisting clients in comprehending the issue of trust that scammers try to establish with their victims. The executive emphasized that customers may avoid spending hours on the phone with fraud victims by simply receiving an email from the exchange. 

He continued, “One really effective way we find of breaking that trust, or at least planting the seed for the victim to question it, is talking to them and giving them that human element because that’s what the scam is doing.”

Breaking Trust is Key to Averting Crypto Scams – Educating the Clients

Breaking Trust is Key to Averting Crypto Scams

According to Jason Titman, CEO of Swyftx, education is another crucial aspect of protecting cryptocurrency consumers, along with communication. He emphasized that a lack of education is frequently blamed for how easily unsuspecting consumers can be persuaded into giving scammers access to their passwords and personal information.

“It’s always been important because, as this is a new asset class, we’ve been educating our customers, particularly about something that’s very relevant and important,” the speaker said.

The speakers also emphasized educating users about topics beyond the cryptocurrency sector.

According to Stocks-Ramsay, many other industries are involved in scams, including social media, banks, telecoms, and others, making cryptocurrency “just one industry within the scams ecosystem.”

In agreement with the CoinSpot executive, Cointree CEO Jess Renden emphasized that cryptocurrency frauds are “not crypto’s fault.” According to her, Australian cryptocurrency companies have aggressively interacted with authorities and other companies, including telecoms and social media platforms.

“Our industry is continually badgered with the message that it is our fault and we are responsible. Everyone here has seen the steps we take to attempt to protect clients.”

The announcement comes after Australia’s leading banks said that 40% of scams include cryptocurrency to support the judgments of some local banks that limited some crypto transactions due to fraud in early June 2023.

The Australian Competition and Consumer Commission’s data shows that in 2022, local investors who utilized cryptocurrencies as the payment mechanism lost almost $150 million. The sum is a 160% increase from 2021.