People from all socioeconomic backgrounds are susceptible to cryptocurrency investment scams, a new survey finds. 

Research involving 745 Australians who had purchased cryptocurrencies or non-fungible tokens (NFTs) underscores the widespread nature of these scams.

Victims are not limited to a single financial status or education level.

“The biggest vulnerabilities for consumers were concerns over security, unsolicited advice, limited options for learning, and a lack of financial and IT literacy,” says Associate Professor Levon Blue, from the University of Queensland's Office of the Deputy Vice-Chancellor Indigenous Engagement and the School of Education.

Cryptocurrency investment scams have led to significant financial losses, with Australians losing $171 million last year alone.

The survey shows that both socioeconomically advantaged and disadvantaged groups are at risk.

The experts say independent online financial education from trusted sources is urgently needed.

The research identified two primary groups vulnerable to crypto scams. 

The first group includes individuals likely to be disadvantaged socioeconomically, with low financial and tech literacy, often influenced by social media hype. These individuals were more likely to be female, Indigenous, casual or part-time workers, renters, with high school education or below, and English as a second language.

“The number one place people learned about cryptocurrency was social media,” Dr Blue says.

The second group comprises individuals from wealthier backgrounds, with high financial and tech literacy. Despite their knowledge, these individuals exhibited overconfidence, believing they were too informed to fall victim to scams. This group included those with university education, full-time employment, non-Indigenous, and homeowners or those paying off a mortgage.

“Our findings suggest that online financial education from trusted independent sources is urgently needed to help combat scams and to keep Australians and their crypto assets safe,” Dr Blue said. 

The researchers say education on alternative financial products should be integrated into schools, vocational settings, and universities.

The study, also involving researchers Dr Congcong Xing from Queensland University of Technology (QUT) and Dr Thu Pham from Griffith University, was published in the Australian Journal of Social Issues.