Crypto exchanges are ramping up efforts to protect users from scams, with a special focus on certain vulnerable groups, according to Adrian Przelozny, CEO of Independent Reserve. The exchange has established a dedicated team that proactively contacts customers to scrutinize suspicious transactions, especially those involving potential scam victims.

Przelozny explained in an interview with Cointelegraph that if they notice an elderly individual, particularly someone in their 80s, making a crypto withdrawal, the team takes immediate action. “If we see an 80-year-old making a crypto withdrawal, they are going to get a call,” he said, emphasizing the heightened vigilance needed to prevent scams.

Targeting the Elderly and Vulnerable

Przelozny highlighted that individuals over 65 are at a higher risk of falling victim to scams due to their limited familiarity with technology and the internet. This demographic is often targeted by scammers, leading to the implementation of preemptive measures by Independent Reserve. The compliance team closely monitors transaction patterns, such as frequent small deposits or withdrawals, that resemble behaviour associated with past scam victims.

The team engages these customers with pointed questions like, “Did someone ask you to open an account on Independent Reserve?” By asking the right questions, they aim to prompt customers to reconsider their actions and recognize potential scams. However, Przelozny noted that this approach does not always succeed, as some victims remain convinced they are pursuing a legitimate investment opportunity.

Younger Victims in the UK

While older adults are often targeted in Australia, younger individuals face similar risks elsewhere. In the United Kingdom, Lloyds Bank reported in November 2023 that individuals aged 25-34 represent a significant portion of crypto scam victims, comprising a quarter of all cases. This highlights the need for vigilance across different age groups and regions.

Handling Defensive Victims

Przelozny acknowledged that some victims may become defensive when questioned about their transactions. They are often deeply convinced of the legitimacy of the “opportunities” presented to them. “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,” Przelozny explained.

To combat this, if Independent Reserve’s compliance team is convinced that a customer is being scammed based on their analysis, they will intervene directly.

“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.

“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.

Adrian Przelozny

We will close down their account and ask them to withdraw all their money back into their actual account,” Przelozny stated.

Scam Risks in Lower-Income Areas

Przelozny also pointed out that people from lower-income areas are particularly susceptible to crypto scams. He suggested that financial desperation might drive individuals to take risks on seemingly lucrative investments. “Maybe you’re more likely to jump at an opportunity to make easy money because you don’t have as much of it,” he said.

While the measures taken by Independent Reserve can occasionally result in some legitimate customers being flagged, Przelozny believes these are rare cases and are a necessary precaution for the “greater good.”

Rising Crypto Scam Losses in Australia

The Australian Federal Police (AFP) reported that Australians lost 382 million Australian dollars ($269 million) to investment scams over the past year, with nearly half of these losses related to cryptocurrency. AFP Assistant Commissioner Richard Chin noted that scammers often use sophisticated marketing techniques and technology, such as pig butchering and deepfakes, to lure victims with promises of high returns and minimal risk.

As crypto scams continue to evolve, the need for proactive measures by exchanges like Independent Reserve is more crucial than ever. By identifying and contacting potential victims early, these platforms aim to reduce the financial damage inflicted by scammers, particularly among the most vulnerable populations.

Source: Cointelegraph