Crypto exchanges need to be more vigilant than ever in preemptively contacting customers to protect them from scams, with one particular group needing extra attention, according to a crypto exchange exec.
“If we see an 80-year-old making a crypto withdrawal, they are going to get a call,” Independent Reserve CEO Adrian Przelozny said in an interview with Cointelegraph.
Dedicated team that rings scam victims
Przelozny further said that, based on the exchange’s data, “people over 65 who are involved in crypto have a good chance of being scammed.” He acknowledged that they are more likely to fall victim because they are “less familiar” with the internet and technology.
Meanwhile, in the United Kingdom, younger customers seem more likely to get scammed.
In November 2023, Lloyds Bank — one of the Big Four banks in the UK — claimed that individuals aged 25–34 comprise a quarter of all crypto scam victims, making them the most commonly affected age group in the UK.
Przelozny explained that Independent Reserve has a dedicated compliance department that “rings people all day” if they notice suspicious activity to warn them that they might be potential scam victims.
Usually, the person’s activity will resemble that of someone who has been scammed before, like making “many small deposits” or “many small withdrawals.”
“They’ll ask the right questions, like, hey, I noticed you’re making a withdrawal, can you tell me more about it? Did you get asked to open an account on Independent Reserve by another person?”
Being highly trained at asking the “right questions,” usually, “things begin to click” for customers, and they realize the scheme “may be too good to be true.” But this is not always the case.
Scam victims can become defensive
Przelozny suggested that sometimes victims are so excited about the scheme they’ve been sold that they don’t even realize it’s a scam.
“People can get really defensive before they realize they are getting scammed; they may think they are on a really good opportunity to make money,” he explained.
“It can be hard to convince them that they are being scammed.”
However, Przelozny said that if the compliance team is confident a customer is likely being scammed based on the available data, they won’t wait for the customer to realize it, as it might be too late.
“If our team is quite sure they are being scammed, even if they [customers] don’t think they are, we won’t allow them to make a crypto withdrawal. We will close down their account and ask them to withdraw all their money back into their actual account,” he said.
Przelozny also pointed out that people from lower-income areas are more likely to fall victim to crypto scams.
Lower-income areas are more crypto-scam-prone
“Maybe you’re more likely to jump at an opportunity to make easy money because you don’t have as much of it,” Przelozny stated.
Przelozny admitted that while there might be a few rare cases where someone is wrongly flagged as being scammed, those situations are rare and worth it for the “greater good.”
On Aug. 28, the Australian federal police (AFP) revealed that over the last year, 382 million Australian dollars ($269 million) had been lost to investment scams, with around 47% of them being crypto-related.
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The methods used relied primarily on modern technology, with pig butchering and deepfakes being the two most common types of scams found by the AFP.
“Scammers promise high returns with little risk, using convincing marketing and new technology to make the investment sound too good to miss,” AFP Assistant Commissioner Richard Chin said.
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