Researchers say Australians from throughout the socioeconomic spectrum may be weak to crypto scams. Photograph: Shutterstock

Rich Australians are vulnerable to falling sufferer to cryptocurrency scams, with “over-confidence” and the sway of social media influencers being key elements, an Australian examine has discovered.

The peer-reviewed survey of 745 Australians who had bought cryptocurrencies or non-fungible tokens (NFTs) discovered financially literate and socioeconomically advantaged individuals who have been non-Indigenous, university-educated and labored full time or owned their very own house have been vulnerable to being over-confident of their investments.

Researchers from The College of Queensland (UQ), Griffith College and Queensland College of Expertise discovered this group of capital-rich Australians understood cryptocurrencies and NFTs, however could have assumed they’d not fall sufferer to a rip-off.

“You might assume that they might not be victims of crypto investment scams, because they have that overconfidence,” UQ Affiliate Professor Dr Levon Blue advised Data Age.

“But that does actually expose them to a little bit of risk and that overconfidence has been shown previously in research about financial literacy to put an individual at greater risk.”

The brand new examine discovered socioeconomically deprived folks with restricted monetary or technological literacy have been additionally weak to cryptocurrency scams.

These folks have been “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”, researchers stated.

The worth of cryptocurrencies Australians paid to scammers rose by 6.5 per cent between 2022 and 2023, totalling $171.1 million in reported loses final yr, in accordance with the Australian Competitors and Shopper Fee.

The newest examine, revealed within the Australian Journal of Social Points, discovered shoppers have been most weak once they lacked information about how to retailer cryptocurrencies and NFTs, weren’t financially literate, obtained unsolicited recommendation, and had restricted choices for studying.

Some have been discovered to not perceive how to calculate tax or curiosity on their investments.

Social media a key influencer

Social media was the most typical place Australians discovered about cryptocurrencies, and girls have been extra prone to be swayed by social media influencers, the research discovered.

“We did see that females were found to be more likely to purchase crypto because of all the hype on social media,” Dr Blue stated.

“And so they tended to not reply any of the crypto literacy questions accurately, so you’ll be able to see vulnerabilities there that have been particular to females.

“That was a little bit of a stunning discovering to me.

“As a result of shopping for crypto — it’s not a regulated area — and our research is exhibiting that the individuals actually weren’t studying about it in formal training areas.

“So it tended to be friends and family as well as social media where they were learning about crypto and NFTs.”

The researchers stated that as a result of social media influencers continued to be “the source of truth when it comes to alternative financial products”, there was a necessity for extra training “to critically unpack social media influencer messaging, especially for young adults”.

_{Researchers say Australians most frequently get their details about cryptocurrencies from social media. Photograph: Shutterstock}

Customers ought to ‘think more critically’

Dr Blue urged shoppers to be cautious, and stated on-line monetary training from trusted impartial sources was “urgently needed to help combat scams and to keep Australians and their crypto assets safe”.

“We recommend that education about alternative forms of financial products is offered to in schools, vocational settings and university,” she stated.

“… Customers actually have to be pondering extra critically about what they’re seeing being promoted or spruiked on social media platforms.

“So actually wanting and occupied with who’s pushing this and what’s behind it, after which doing a little bit of your personal research earlier than you leap straight into buying what’s being instructed.”

Dr Blue stated the safe storage of cryptocurrencies was additionally a key challenge for some folks, as a consequence of its intricacies.

Whereas solely a minority of individuals within the examine reported dropping their cryptocurrencies or NFTs due to storage points, greater than half who did stated they misplaced greater than $1,000.

“I do think if people are going to invest in this space that they should look into how to store it safely, and what the secure options are,” she stated.

“If they lose their crypto there’s no one they can fall back on to help them out there, so they really need to research that space.”