While there may be rare instances of wrongly flagged accounts, Przelozny believes that the overall protective measures implemented benefit the wider community.

Additionally, individuals from lower-income areas are more susceptible to crypto scams, often drawn in by the promise of quick financial gains.

In light of these alarming statistics, crypto exchanges are urged to enhance their vigilance in reaching out to customers to prevent scams, especially those targeting vulnerable groups.

The Australian Federal Police reported a staggering loss of $269 million to investment scams in the past year, with nearly half of these scams involving cryptocurrency.

Adrian Przelozny, CEO of Independent Reserve, emphasized that customers over 65 are particularly vulnerable to scams due to their limited familiarity with technology.

Independent Reserve has taken proactive measures by employing a dedicated compliance team that contacts customers showing suspicious activity to alert them about potential scams.

This compliance team is trained to recognize red flags, such as multiple small deposits or withdrawals that mirror patterns seen in previous scam victims.

Trained staff engage with customers through targeted questions to help them realize they might be involved in a scam, although some victims may initially react defensively.

Interestingly, in the UK, younger individuals aged 25-34 account for a quarter of all crypto scam victims, highlighting that scams affect a wide demographic.

Przelozny also pointed out that victims can become overly excited about scams, making it challenging for them to accept they are being deceived.

If the compliance team suspects a customer is being scammed, they have the authority to close the customer's account and prevent withdrawals to safeguard their funds.

Scammers often employ modern technology, with tactics like 'pig butchering' and deepfakes becoming increasingly common, as noted by AFP Assistant Commissioner Richard Chin.