Australia’s Regulator Cracks Down on Over 600 AI-Driven Crypto Scams

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Australia’s financial markets regulator, the Australian Securities and Investments Commission (ASIC), has revealed a major crackdown on crypto scams over the past year, dismantling over 600 fraudulent schemes. On August 19, ASIC noted the growing sophistication of crypto fraudsters, who are increasingly leveraging artificial intelligence (AI) to deceive unsuspecting investors.

A Rise in Crypto Scams

Since July 2023, ASIC has successfully taken down more than 5,530 fake investment platforms, 1,065 phishing links, and 615 cryptocurrency scams. This aggressive action comes amid escalating concerns over the role of AI in facilitating new forms of deception.

ASIC Deputy Chair Sarah Court expressed particular alarm over the use of deepfakes and AI-generated imagery, which are making it increasingly difficult for individuals to identify fraudulent schemes.

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“The scams landscape is rapidly evolving,” Court warned. “While technological advancements may enhance our daily lives, they also provide scammers with new tools to exploit consumers.” Court emphasized that an average of 20 scam websites are taken down daily, with investment scams remaining the leading cause of financial losses in Australia, costing citizens a staggering $1.3 billion in 2023 alone.

Fake Celebrity Endorsement

One of the most concerning tactics employed by these scammers is the use of fake celebrity endorsements. High-profile figures such as Chris Hemsworth and Elon Musk have been falsely portrayed as endorsers of fraudulent crypto investments, luring consumers into schemes that promise low initial costs and unrealistically high returns.

Earlier this month, the Australian Federal Police (AFP) launched an investigation into a series of crypto phishing scams, which have already compromised at least 2,000 Australian-owned crypto wallets.

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AI: A Blessing or a Boon?

While the rise of AI in scam operations is alarming, there is also hope that AI could be part of the solution. In January, Ben Goertzel, CEO of SingularityNET, suggested that AI could help combat crypto scams by generating personalized summaries of crypto entities’ reputations. By analyzing raw data and reports from various sources, AI could provide users with clear indicators of potential red flags.

However, Goertzel acknowledges that while AI can enhance awareness, it is unlikely to prevent all instances of crypto fraud.

Notably, in July, the HSBC Australia blocked payments to crypto exchanges, citing issues regarding growing frauds.

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