The head of Australia’s competition regulator, Gina Cass-Gottlieb, has warned that Donald Trump’s plan to relax crypto regulations could have negative consequences for Australian consumers. Cass-Gottlieb expressed concerns that any weakening of oversight in the US could make Australian consumers more vulnerable to investment scams, especially in the crypto space.
Trump, who has expressed support for cryptocurrencies, has vowed to make the US the “crypto capital of the planet” and has already initiated changes to create a more favorable regulatory environment for the industry. This is a departure from the approach taken by President Joe Biden, whose administration pursued legal action against major crypto firms and adopted a more enforcement-focused regulatory strategy.
According to data from the Australian Competition and Consumer Commission (ACCC), Australian consumers lost over $1.3 billion to investment scams in 2023, with crypto being a significant factor in many of these schemes. As part of its priorities for the coming year, the ACCC is focusing on combating financial fraud and scams, including those related to crypto, as well as addressing broader competition issues in industries such as aviation and retail.
The ACCC has raised concerns that any relaxation of crypto regulations in major markets like the US could create opportunities for scammers to target Australian investors. This comes at a time when Australia is still debating its own approach to regulating digital assets, with stricter licensing requirements already in place for crypto service providers but calls for additional oversight to protect consumers from fraudulent activities.
The rise of crypto scams is a global issue, with pig butchering scams – a long-term method of grooming victims before coercing them into fraudulent investments – accounting for significant losses in 2024, according to a report by Web3 security firm Cyvers. Scammers are increasingly using dating apps and social media to lure victims, creating fake profiles to build trust before convincing them to invest in fraudulent platforms. However, cyber investigators have also made progress in recovering stolen assets through on-chain tracking and bug bounty programs.
The ongoing debate over crypto regulation highlights the challenge policymakers face in balancing innovation and financial security in the rapidly evolving digital asset space. As mainstream adoption of cryptocurrencies continues to grow, ensuring consumer protection and combatting fraudulent activities will be crucial priorities for regulators around the world, including in Australia.
