Surprising group falling for crypto scams

University educated and home owning Australians are falling victim to cryptocurrency scams because they are overconfident or overambitious, new research has found.

The University of Queensland research identifies tertiary educated Australians are falling for crypto scams at similar rates to people with characteristics typically associated with socio-economic disadvantage

Cryptocurrency investment scams cost Australians a reported $171 million last year.

In researching the issue, the University of Queensland researchers surveyed 745 Australian adults who had purchased cryptocurrencies or non-fungible tokens.

Broadly speaking, two distinct groups were vulnerable to losing funds to scams.

“The first were more likely to be female, Indigenous, casual or part-time workers, renters, a high school or below education or with English as a second language – so with a lot of features we associate with socio-economic disadvantage,” Associate Professor Levon Blue said.

Dr Blue is an associate professor at the university’s Office of the Deputy Vice-Chancellor Indigenous Engagement.

This first group reported being influenced by social media hype to buy crypto and lacked sufficient financial or IT literacy.

But a more educated second group is being scammed at similar rates for different reasons.

“In contrast, the other vulnerable group could be seen as having more socio-economic advantage such as a university education, full-time work, being non-Indigenous or owning their home or paying off a mortgage,” Dr Blue said.

“This second group were more financially literate but may have assumed they wouldn’t become a scam victim and been overconfident or overambitious, exposing themselves to risk.”

The researchers recommend education about alternative forms of financial products is offered in schools, vocational settings and university.

Of the 745 coin holders surveyed in the university research, 30 per cent admitted to investing in the digital money system after being influenced by online content.

Queensland-based crypto analyst Sydel Sierra said there had been lots of hype about different crypto coins, and people had invested without doing any due diligence because of fear of missing out.

“Some of that information on social media is indeed true and incredibly usual, some of it not so much, that’s why first time investors need to be careful,” Ms Sierra said.

“Improve your financial literacy,” Ms Sierra said.

“The big one is bots on social media wanting to manage your Crypto - avoid those at all costs, and always maintain custody of your asset.”