Bitcoin remains the most popular cryptocurrency both as an investment vehicle and as a means of payment. However, scammers are investigating the payment aspect to defraud victims, resulting in losses running into the millions. And according to the results compiled in 2020, Bitcoin payment fraud ranks second in Australia, just behind bank transaction fraud.

# 2 Bitcoin Payment Fraud in Australia

According to data compiled by the crypto trading simulator Crypto Parrot, the Australians lost the equivalent of A $ 26.65 million to scams where Bitcoin was the payment method in 2020. Although Bitcoin is a new payment method, fraud related to this cryptocurrency ranks second only to banks.

Bank transaction-related fraud totaled A $ 97.65 million, which is at least 3.7 times the amount lost in Bitcoin payment fraud. Other unknown payment methods ranked third at A $ 24.17 million, while cash came fourth at A $ 8.57 million. Credit cards rank 5th at AUD 8.1 million.

Elsewhere in terms of scams reported in 2020, payment methods not provided topped the list with 190,959 cases, followed by banks with 8,215. In third place came credit cards with 6,267 cases, followed by PayPal with 2,761. Other payment methods rank fifth with 2,680 cases. Bitcoin cases rank sixth with 1,985.

Why Bitcoin Payment Fraud ranks 2nd in Australia

Bitcoin payments in scams rank higher as most scammers have come up with creative ways to attract victims. Popular programs involve fake investment opportunities that promise victims high returns. Most victims lose money because the programs are fake.

First, the country’s regulator, the Australian Securities and Investments Commission, found that bitcoin-related scams had increased amid the coronavirus pandemic. During the lockdown, most people are forced to stay at home. Digital platforms such as social networks have been used as a gateway to pastime, and the coronavirus health crisis played a part in Bitcoin being used as a payment method for scams in Australia. According to research report:

“In the midst of the pandemic, most people spend more time online on social media platforms, which makes them the perfect base from which to reach out to potential victims. In particular, the victims used social media to share their referral codes with friends and contacts, adding many to the group associated with the fake investment program. Overall, social media is a great tool for scammers who understand that most people are afraid of missing out. “

In addition, the fundamental nature of Bitcoin, being decentralized and anonymous, has helped the cryptocurrency to be used as a payment method in scams. These characteristics make it difficult to trace the beneficiaries of the fraudulent funds.

In the end, the scammers got along well with social media. Most victims are forced to share their referral codes with friends to spread the word about their new investment opportunities. As more people use social media, the fear of getting lost begins to fall into the hands of scammers.

Bitcoin’s role in facilitating fraud has come to the fore in recent months, with critics citing this ability as a reason to bypass the law. Most jurisdictions are considering introducing strict regulations because of Bitcoin’s role in crime. In particular, the rise among the top payment methods for fraud gives regulators even more reasons.

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