In an eye-opening move, Adrian Przelozny, CEO of Independent Reserve, has revealed that his crypto exchange is proactively tackling the ever-growing problem of cryptocurrency scams by reaching out to potentially vulnerable customers. This approach is particularly focused on older individuals, a demographic that is increasingly becoming a target for fraudulent schemes.
Przelozny shared that if someone over the age of 80 makes a crypto withdrawal, they will receive a call from Independent Reserve’s dedicated compliance team. This team’s role is to scrutinize transactions that might indicate scam activity. Przelozny explained that older adults, particularly those over 65, are more likely to be scammed due to their relative unfamiliarity with modern technology and online threats.
In contrast, the UK data paints a different picture. According to Lloyds Bank, individuals aged 25-34 are the most common victims of crypto scams in the UK. This demographic appears more susceptible to scams, perhaps due to their high engagement with digital platforms and investments.
Independent Reserve’s strategy involves their compliance team calling users who exhibit suspicious behavior, such as making numerous small transactions. These calls aim to verify the legitimacy of the transactions and provide a reality check for users who might be on the brink of falling for a scam. The team asks questions to probe the nature of the transactions and whether the user was pressured to open an account by someone else.
However, Przelozny noted a challenging aspect of this process: scam victims can sometimes be so enthusiastic about the “opportunity” they’ve been sold that they become defensive when questioned. They might see the scam as a lucrative venture and resist the idea that they are being duped.
To prevent significant losses, if the compliance team suspects a scam, they will take immediate action. Even if the customer does not believe they are being scammed, the team may block the withdrawal and close the account to protect the user’s funds, advising them to move their money back to a secure account.
Przelozny also highlighted that individuals from lower-income areas are more frequently targeted by scams, possibly because they are more eager to find quick financial gains. Despite the possibility of occasionally flagging legitimate transactions by mistake, the broader goal is to safeguard users from losing their assets to scams.
The Australian federal police (AFP) recently reported that investment scams, with a significant portion involving cryptocurrencies, resulted in a staggering 382 million Australian dollars (around $269 million) in losses over the past year. Scammers are increasingly using advanced technologies like deepfakes and sophisticated marketing strategies to lure victims with promises of high returns and minimal risk.
In this evolving landscape, the proactive measures taken by crypto exchanges like Independent Reserve highlight the urgent need for vigilance in protecting users from scams. For crypto traders, especially those who are less tech-savvy or from lower-income backgrounds, being aware of these efforts and staying informed about potential scams can make a crucial difference in safeguarding their investments.
