One-Fifth of ASIC’s Two-Year Crackdown Involves Cryptocurrency Scam Websites

Australia’s securities regulator revealed that it has taken down more than 14,000 scam and phishing websites over the past two years, with about one-fifth linked to crypto schemes, as announced on Thursday.

ASIC plans to extend its capability to remove investment scam sites to include social media ads, aiming to protect Australian consumers from increasingly elaborate online fraud. Approximately 3,015 cryptocurrency scam websites have been disabled, according to the regulator.

“ASIC could take a more proactive role in educating the public on the differences between unregulated trading platforms (which expose investors to greater scams and bad actors) and regulated instruments,” stated Bridget Nichols, chief commercial officer at Australian crypto asset manager Monochrome, during an interview with Decrypt.

According to the statement, ASIC continues to eliminate an average of 130 malicious sites each week, with the expanded powers intended to disrupt scammers leveraging platforms like Facebook and Instagram to lure victims to fake investment sites.

Regulated instruments offer “standard protections for investors,” including necessary disclosures, custody regulations, and conflict management, Nichols noted.

Investment scams continue to be the most damaging type of fraud impacting Australians, with victims losing $945 million to such schemes in just 2024.

“Enhancing our investment scam takedown abilities to target social media advertisements will offer better protection for Australian consumers,” ASIC Deputy Chair Sarah Court emphasized in a statement.

ASIC identified five key trends in online investment fraud over the past six months, including

the rise of “AI washing,” where scammers incorrectly assert that their trading bots utilize artificial intelligence to guarantee returns, taking advantage of the public’s interest in this technology.

Scammers are using polished website templates and third-party tools such as live trading charts, along with fake news featuring AI-generated celebrity endorsements and “cloaking” techniques to avoid detection.

“ASIC’s traditional methods—investigations, court actions, administrative measures—are significant, but they alone cannot tackle the pervasive issue of online scams,” Court commented.

The addition of crypto enforcement comes amid heightened regulatory scrutiny of these assets in Australia.

Earlier this month, ASIC filed charges against four individuals from Victoria, including a former barrister, for money laundering related to the transfer of proceeds from large-scale investment scams to cryptocurrency exchanges.

Last month, Australia’s financial intelligence agency designated crypto as a primary threat in its fight against financial crime, describing it as the “most comprehensive reform of Australia’s anti-money laundering laws in generations.”

The broader crypto ecosystem is plagued by security flaws, as Mitchell Amador, CEO of Immunefi, shared with Decrypt, “This year, if we analyze just the first half, we are on pace to lose approximately 3.6–4% of the total assets of the sector to hacks, which is astonishing.”