Staying Safe in Crypto:

Your Guide to Recognising and Reporting Financial Scams

Introduction

At Elbaite, Australia's pioneering self-custody cryptocurrency exchange, we are committed to safeguarding our users in the dynamic world of digital currencies. Understanding the risks associated with cryptocurrency trading and ownership, including potential scams, is crucial. Our mission is to provide a secure trading platform and empower our users with the knowledge they need to trade confidently and safely.

Elbaite's Independence

Elbaite does not provide financial advice, and is not affiliated with any third party advisors, traders or investment companies. We recommend that all users exercise caution before engaging in any trade or investment, especially when suggested by a third party. If someone is providing you with financial advice, check their credentials. An Australian financial adviser should be found on ASIC’s Register.

Baseline Technical Knowledge Checklist

As an emerging technology, it's crucial for anyone starting their cryptocurrency investment journey to have a foundational understanding of its technical aspects. A lack of technical knowledge can leave you vulnerable to scams and exploitation.

It is recommended that you familiarize yourself with some key technical concepts and practices. This isn't just about being tech-savvy; it's about safeguarding your investment and protecting yourself online.

Here’s a simple checklist to guide you:

  1. Have you generated a wallet address before? 
  2. Do you know the difference between a private key and a public key? 
  3. Have you made a plan on how you will store your private keys in your wallets safely? 
  4. Does your private key storage method strategy cater for these disaster scenarios: 
  1. A fire: is your storage method susceptible to a fire incident?
  2. Online hack: did you store your private keys in an insecure online location such as an online folder in your Google Drive? 
  3. Physical theft: is your storage location known to others and susceptible to theft?
  4. Mobile phone loss/ or change of mobile phone: particularly crucial if you are using a mobile wallet

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Self Custody

Customers of Elbaite provide their crypto wallets. Elbaite does not generate or provide any wallets for customers. 

There are specific services that you can use to create your wallet, these are known as wallet providers. Each type of wallet provider has a different method of wallet generation, encryption and cybersecurity risk. Some examples of wallet providers are:

The wallet provider will generate the private key and public key for that wallet. 

If you do not know your wallet provider's name and were only provided with a wallet address by someone else, then you might be the target for a scam. Scammers will often generate the wallet on their end using a wallet provider and will provide the public address to their potential victim. 

If you purchase cryptocurrency through Elbaite, you must provide your wallet address.  If you are purchasing crypto, this is the destination address to which the cryptocurrency will be transferred irrevocably when payment has been received.  You should own and control the wallet address you use on Elbaite. You should never use a destination wallet address that has been given to you by a third party.

Cryptocurrency transactions are irreversible and immutable due to the nature of blockchain technology. Once a transaction is executed, it cannot be undone.  If someone has given you a wallet address to use on Elbaite, then, when you have completed your purchase, the crypto will be transferred to a wallet that belongs to or can be accessed by the person who gave you its address.  If that person is a scammer, then the purchased crypto will be under their control.

Knowing the private keys to your crypto wallet equates to ownership and control of the cryptocurrency held in that wallet. At Elbaite, we prioritize your security and autonomy, so we never request, store, or handle your private keys. We only require your public wallet address, also known as the destination address. Be aware that if you're using a crypto wallet where the private keys were provided to you by someone else, then that person might still be able to access your wallet. If that person is a scammer, then the purchased crypto will be accessible to them.

Type of Wallet

Examples of Wallet Providers

Hardware Wallet
(Cold Storage)

Trezor, Ledger Nano

Mobile Wallet
(Hot Storage)

Metamask, Trust Wallet

Don't Get Scammed!

Scamming is not new, but it has reached alarming new heights, facilitated by pervasive internet and mobile communications, social media, economic conditions and artificial intelligence. Scammers can be engaging, polite, charming, persuasive, funny, friendly, interesting, and seem credible. Scammers aim to deceive you to steal your money or identity. They will exploit all and any vulnerabilities without a second thought for your well-being. Be on your guard.

Common Scam Signs

Scammers are criminals who are trying to trick you into giving them something they want: your identity, information about you, access to your Elbaite account or bank accounts, or demanding transfer of value for a personal, charitable or threatening reason.

Scammers:

  1. try to gain trust by claiming to be from a well-known business, government agency or by impersonating a known contact that they have obtained from your social media;
  2. will suggest their own verification procedures, like going to websites they have created or calling numbers they provide to you;
  3. research how to appeal to your emotions and press your buttons to get what they want;
  4. create a sense of urgency to get you to make decisions without thinking.

Common Scam Examples

Investment Scams

Targets are lured with the promise of high returns through fake investment opportunities.

  • Scenario: An email from “Crypto Experts” says that they have special knowledge that ETH is about to double in price, but you “must act now, or miss out”. The sender claims to be a partner of Elbaite and instructs you to open an Elbaite account using a wallet address they have provided.  They tell you to say that it’s your crypto wallet when asked.
  • Contact Method: Via email or online advertisements.
  • What Not to Do: Don't use the wallet address provided on Elbaite.
  • What to do:  Forward the email to scamreport@elbaite.com.au.

Romance Scams

Scammers create fake romantic relationships to manipulate victims into sending money, often for fabricated emergencies.

  • Scenario: An individual you met on a dating app quickly declares love and asks for BTC for a personal emergency. They give you a crypto wallet address and ask you to enter it as the destination wallet for your purchases on Elbaite.
  • Contact Method: Through dating apps or social media.
  • What Not to Do: Don't use the wallet address provided on Elbaite.
  • What to do:  Question the motives of the person making the request.

Product & Services Scams

Victims pay for products or services that are never delivered or are significantly different from what was advertised.  Payment is never refunded.

  • Scenario: You see an ad on social media for something you want from a supplier in the Bahamas. The price looks great, but payment must be in BTC to a wallet address they display.  You ask via chat how to buy BTC to make payment, and they direct you to Elbaite.  After several months the product hasn’t arrived and you want to cancel the purchase. No refund method is available.
  • Contact Method: Through social media advertisements.
  • What Not to Do: Don’t use crypto for payment unless you are certain of the vendor’s credentials and integrity.
  • What to Do: Investigate vendors and websites before purchasing. Think beforehand about what you can do if things go wrong.

Threats and Extortion Scams

Victims receive threats to expose personal information or inflict harm unless a payment is made.  Note that the scammer might not even have any personal information about you.  All they need to know is that information has been leaked, eg through publicized cyber hacks like Medicare and Optus.

  • Scenario: You receive a threatening text message demanding payment to prevent personal Medical information from being leaked.  Payment is demanded in BTC.  The sender claims that you “must” pay by 5pm or the sender will email your employer.
  • Contact Method: Via SMS or email.
  • What Not to Do: Don't pay or respond to the threats.
  • What to Do: Report to authorities - your State’s police cybercrime squad or the national cybersecurity hotline 1300 CYBER1 (1300 292 371).

Impersonation Scams

Scammers pose as trusted officials or authorities to trick victims into sending money or revealing personal information.

  • Scenario: Someone calls claiming to be from the Tax Office and demands immediate payment for a supposed debt. The payment must be in BTC today or you will face a huge fine.  The caller suggests that you can buy BTC from Elbaite and transfer it to the Tax Office’s cryptowallet.  The caller asks you to verify your Tax Number.
  • Contact Method: Through phone calls.
  • What Not to Do: Don't provide personal information or make payments without verification.

Scammers also pose as people you know - a Facebook contact, or a child or grandchild in distress.

  • Scenario: A Facebook “friend” alerts you to a great investment opportunity: invest in a cryptocurrency and double your money.  They invite you to a Facebook “investment group” where there are testimonials from “satisfied” customers (all fake).
  • Through social media
  • What Not to Do: Don't provide personal information or make payments or crypto transfers without verification.
  • What to do: Check how you became a “friend”.  Is this really a person you know? 

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Charity Scams

A charity scam involves a fraudulent entity or individual falsely claiming to represent a charitable cause to solicit donations from unsuspecting donors. These scams often exploit current events or humanitarian crises to appear legitimate.

  • Scenario: An email campaign asks for donations in Bitcoin to support war orphans from the Ukrainian or Palestinian conflicts. The message includes a BTC wallet address for contributions.
  • Contact Method: Often via email, social media, or fake websites.

What Not to Do: Do not send money or personal information without verifying the legitimacy of the charity. It is always best to check the ACNC Charity Register to ensure a charity is legitimate before donating to them.

Scammer Tricks

Scammers have used all of these methods to engage would-be victims:

  • Unsolicited Offers: promises of ways to make fast, easy returns through “investment”.
  • Fake Celebrity Endorsements: advertisements featuring celebrities that are fabricated.
  • Relationships: Social media approaches based on dating, and interest groups.
  • Fake Apps: Using QR codes or other links to load phones directly rather than via Google Play or the Apple Store.
  • Fake lottery wins: Claiming that you’ve won a lottery and all you have to do is pay a “transfer” fee to get the money.
  • Fake job offers: requiring payment for training or equipment, with no real job at the end.
  • Inheritance: a distant relative has died, you are a beneficiary but must pay “legal fees” to access the money.

Scammers will continue to use these and other scenarios.  More are invented and perfected every day.

Simple Do's & Don'ts

Do

Don't

Ask questions: who is behind this phone call / mail / SMS / website / post? Is the requested action reasonable? Can I verify it?

Don’t act quickly without thinking.  This makes you the scammer’s ideal victim.

Multi-Factor Authentication: Enable it for added security.

Account Setup by Others: Don’t let someone else set up your Elbaite account, MFA or digital wallet.

Strong Passwords: Use complex unique passwords for account security.

Sharing Sensitive Info: Never reveal login credentials or private keys.

Official Site Verification: Confirm you're on Elbaite's genuine site for all transactions.

Unknown Wallet Addresses: Don't add crypto wallet addresses you don't control to your Elbaite account. Simple questions to ask to ensure that you control your wallet: Do I know the name of the wallet provider that generated this wallet?Do I know the private keys? Do I know where the private key is stored? Do I know who has access to those private keys?

Stay Updated: Remain subscribed to Elbaite's emails for the latest updates.

Impulsive Trading: don’t act on demands, tips or “advice” without  research and validation.

Seek Support: Contact customer support for any queries or doubts.

Unexpected contact: don’t take advice or instructions from someone you don’t know or can’t verify independently.

Procedure for Reporting Scams

If you encounter any suspicious activities, we encourage prompt reporting to authorities such as Scamwatch and ReportCyber. At Elbaite, while we strive to minimize risks through our secure platform, being vigilant and reporting suspicious activities is a shared responsibility that enhances the safety of the entire crypto community.

Government Resources

We recommend leveraging Australian government resources like Scamwatch and the ACSC to stay informed about scam awareness. These resources complement the secure and user-centric trading experience we offer at Elbaite, ensuring our users have access to comprehensive information for safe trading practices.

Other useful sites include:

Elbaite's Support & Assistance

Elbaite is committed to providing extensive educational resources, including informative blog posts, to deepen our users' understanding of the crypto market and scam prevention - which you can find on our official website, Elbaite Learn. These resources are designed to enhance your trading knowledge and safety.

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Should you have any queries or concerns regarding potential scams, our dedicated customer support team is here to assist. Elbaite takes a proactive approach to protecting our users, offering support and guidance to ensure a secure trading experience.

Self Custody crypto is made easy with Elbaite. Start your journey today.

Get Started Now

Elbaite Pty Ltd (ACN 623 185 875) operates a digital currency exchange registered with AUSTRAC. Please note that digital asset prices can be volatile. Elbaite does not provide digital wallets and we do not have access to your digital currency. We will never ask for the private keys to your digital currency wallet. Elbaite is not liable for any losses you may incur, and you are solely responsible for your investment decisions. Before deciding if our services are right for you, take into consideration your own financial situation & needs and/or obtain professional financial or taxation advice from a licensed provider. Elbaite does not provide financial advice and Elbaite does not have any affiliation with external traders, advisors or trading platforms.