Australia to Shut Down 95 Companies for Their Possible Links to “Hydra-Like” Scams

The Australian financial market regulator is going to shut down 95 companies with links to online investment and romance baiting scams, also known as “pig butchering” scams, after obtaining a court order.

Rising Scams Across the Globe

In these scams, fraudsters approach potential victims while pretending to be someone else on social media and build trust over weeks or even months. Then, they slowly suggest investment ideas involving risky instruments like contracts for differences or cryptocurrencies. These are well-organised scams run by criminal groups. According to a report by The Economist, criminal networks run these scams from large centres in countries like Myanmar.

Recently, investigative reporters uncovered two major boiler room scam operations: one was based in Georgia, while the other had several European centres and was controlled from Israel.

These scammers usually target victims in high-income countries. Reports also found that they take advantage of weaknesses, with some of the targets even being bank CEOs and tech workers.

“Hydra-Like” Scams

Announced today (Monday), the Australian Securities and Investments Commission (ASIC) obtained a Federal Court order to wind down the companies, as most were registered using false information. Some are also suspected of being set up with stolen identities.

The regulator further noted that most of these companies were linked to websites and apps that may be involved in scams. Scammers use these websites and apps to offer fake investment opportunities through fake trading platforms for forex, crypto, and commodities.

“ASIC believes many of these companies were set up to give a false sense of trust by pretending to offer real services,” said ASIC’s Deputy Chair, Sarah Court. “This action has shut these companies down and protects consumers from businesses with no proper management or control, including some connected to possible scam activity.”

The regulator also pointed out that scammers use complex methods to target their victims, including setting up fake companies and websites that look professional, to make victims feel safe.

“These scams are like hydras: you shut down one, and two more take its place,” said Court.

Earlier, the Australian regulator revealed it had removed 10,240 investment scam websites, including fake platforms, phishing links, and crypto scams. However, according to data from the Australian Competition and Consumer Commission (ACCC), Australians lost AU$2.74 billion to financial fraud and scams. Although this figure was high, it dropped by 13.1 per cent in one year.