Collaboration is key to protecting Australians from rising cybercrime: Binance

Amid rising cases of cybercrime, fighting scammers is everyone’s business, writes Binance’s head of law enforcement training.

Pic via Getty Images

• Cybercrime is on the rise, with more than 600,000 scams reported last year according to new research

• However, according to Binance, crypto hacks have steadily declined in the past few years

• The crypto exchange notes it has partnered with global law enforcement on blockchain training and scams prevention

 

Special Report: Amid rising cases of cybercrime, fighting scammers is everyone's business, writes  Jarek Jakubcek, Binance's head of law enforcement training.

As we mark Cyber Security Awareness Month in Australia, skyrocketing scams and cybercrime are firmly on the radar. The latest data reveals Australians lost $2.74 billion to cybercrime in 2023, with more than 600,000 scams reported.

Transactions on the blockchain, like cryptocurrency, are emerging as the new frontier against cybercrime due to their unique levels of transparency, security, and traceability.

Binance Research shows global cryptocurrency hacks have continued to steadily decline since 2021, as the industry invests in stronger security protocols. In fact, data from Chainalysis shows a notable drop in the value of digital assets received by illicit crypto addresses from US$39.6 billion in 2022 to US$24.2 billion in 2023.

We need to put this into perspective, as the overall size of illicit finance is in the trillions: at US$3.1 trillion in 2023 according to NASDAQ, while the United Nations Office on Drugs and Crime estimates that between 2-5% of global GDP is laundered each year, the current equivalent of up to US$2 trillion.

The fact that the overall size of illicit traditional finances is a very rough estimate, while the amount of illicit crypto transactions is based on hard figures, underscores the transparent nature of the blockchain to trace and quantify crypto activity in a way that is nearly impossible for traditional finance.

Globally, governments, regulators, and law enforcement authorities are recognising the benefits of this transparency and the power of crypto and the blockchain in protecting citizens from cybercriminals. Working with global law enforcement, Binance recovered or froze US$73 million in illicit funds in 2024.

In Australia, we recently worked closely with the Australian Federal Police Force, and other law enforcement agencies, to recover stolen funds for an Australian woman who fell victim to a Business Email Compromise scam and sent $777,000 to the scammer’s bank account.

The police identified $300,000 of the stolen funds had been transferred to a fraudulent Digital Currency Exchange  account. Given the transparent nature of blockchain, we were able to track, trace, and freeze the account, and assist law enforcement to recover and return most of the stolen funds to the victim.

Blockchain technology can enable effective tracing and investigations, but we must increase our support of law enforcement’s efforts to stop cybercrime and educate them on blockchain’s crucial role in stamping out illegal activity.

Binance continues to invest heavily in training global government and law enforcement on how to leverage the benefits of blockchain technology to prevent scams, identify cybercriminals and recover misappropriated funds. To date, our investigations team has held over 200 training sessions through our digital and in-person Global Law Enforcement Training Program events.

Locally, we’ve also hosted an in-person event in Canberra to educate parliament on blockchain and discuss the increasing need for local regulation. We hope these education efforts will result in a more resilient financial system and coordinated line of defence.

Fighting scammers is everyone’s business

While blockchain has several in-built safety mechanisms and a high degree of traceability, we would be remiss to ignore that Australians lost at least $180 million to crypto-related scams in 2023-24.

Strengthening resilience, collaboration, and education is key to protecting Australians from online investment scams. The industry undoubtedly has an important role to play in this.

At Binance, we use a sophisticated risk engine, blending AI and manual audits, as well as transaction monitoring to constantly scan for and act on suspicious activity on our platform.

We also give users the security tools they need to be safer, including a verification system that allows the public to check whether a source officially represents Binance. In the first half of 2024, these global security measures have prevented over US$2.4 billion in potential losses for more than 1.2 million users.

We also cooperate closely with law enforcement agencies around the world, and in the last year, have processed over 60,000 requests, globally.

However, users must remain vigilant. Interactions where the victim voluntarily transfers funds directly to the scammer are difficult, and sometimes nearly impossible, to identify and prevent. Prevention is always better than cure.

There is also a clear role for regulatory oversight in this fight and the Australian government is stepping up.

This year, the government has introduced a new draft Scams Prevention Framework for banks, telcos, and social media platforms to be more vigilant and proactive on scams. The framework will fine companies and hold them liable for victim compensation if they do not meet their obligations to detect, prevent, and disrupt scam activity.

At Binance, we believe more public-private partnership and collaboration can lead to common market standards that protect users effectively.

As Cyber Security Awareness Month reminds us, “cybersecurity is everyone’s business” and while industry and government need to lead the way, every Australian has a role to play in protecting themselves against cybercrime.

There are four simple steps every Australian can take to improve cybersecurity, including activating multi-factor authentication, keeping devices and software up-to-date, using strong and unique passwords or phrases, and being quick to report phishing through the Australian Government’s ScamWatch.

Prevention of a financial loss is always much easier than subsequent efforts to investigate and recover funds. To avoid falling for crypto-related scams, we believe it is important for individuals to do their own research, understand the technology behind cryptocurrencies, take proper security measures, and avoid guaranteed offers of high returns.

This is especially true for any interaction, where financial advice is provided through unsolicited means or by an unknown person online. At Binance, we regularly post advice on our website and social channels on how to spot the latest scams, while actively acknowledging current ones.

The simple truth is we are in a cat-and-mouse game trying to keep scammers at bay. While scams are a growing phenomenon, they are certainly not a new one.

Blockchain and digital currencies are important tools to help identify and investigate rising cybercrime. Yet, collective vigilance – from government, industry, and individuals – could prove our most important weapon in building a resilient global economy and digital ecosystem.

This article was developed in collaboration with Binance, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Originally published as Collaboration is key to protecting Australians from rising cybercrime: Binance