Fraudulent online cryptocurrency trading platforms are increasingly targeting Canadian investors, prompting a warning from the BC Securities Commission and other national regulators.
On Monday, the Canadian Securities Administrators (CSA), including the BC Securities Commission, warned how some people are being caught up in scams trying to capitalize on market interest in cryptocurrency assets, such as Bitcoin or Ethereum.
The scams may vary from one another, but they have common characteristics, such as being promoted through emails, text messages, websites, and social media that exploit the current popularity of cryptocurrencies, a digital currency produced through online transactions that they can be bought with cash, but that has not been done yet. take root in common consumer transactions.
Fraudsters target investors hoping to get in 'on the ground floor' with crypto assets and exploit their fear of missing out on the opportunity of a lifetime, the CSA stated.
Investors report that marketing materials direct them to these fake, often counterfeit, trading platforms where deposits are made and the crypto asset appears in an account. Investors are then encouraged to transfer the crypto assets to a fraudulent third-party investment website.
Fraudsters can even use software downloaded by investors to remotely access your computer for supposed assistance in buying crypto assets and transferring funds.
Investors can then see false returns on their investment, through manipulated statements. They are then persuaded to make more deposits.
โSome websites will allow investors to withdraw a portion of their money to build trust and entice victims to invest more, but any request to withdraw all assets will fail. Ultimately, fraudsters will no longer respond to investor communication requests,โ CSA stated.
Last September, the CSA issued guidance for Cryptocurrency Trading Platforms (CTPS). As the law firm McCarthy Tetrault points out, โCTPs with Canadian-resident clients are considered by Canadian securities regulators to be subject to securities law if, for example, the crypto assets are not immediately delivered to the clients. Foreign-based CTPs with clients in Canada are also considered subject to Canadian securities laws.โ
How do I protect myself from crypto scams?
There are steps people can take to protect themselves.
You can find out if the company or person involved is registered by consulting the CSA National Registry. If you are registered, officials advise you to call the phone number listed to confirm any requests.
The CSA also encourages investors to:
- Do not trust unsolicited marketing materials. Do an Internet search for the company name and verify contact information directly with the financial institution or company.
- Check for misspellings or variations in the company name on the website or in the email address, including adding extra letters or hyphens to make the fake address look like the real address.
- Compare and confirm websites. Fake websites can often have weird-looking (or low-resolution) logos that don't match the legitimate company's logo. Conduct an Internet search for the company to determine if the website is legitimate or a duplicate of the company's real site.
- Refuse to download software that allows remote access to your computer.
- Never give in to pressure or blackmail โ transfer your money only after taking the time to think it through.
- Never share personal information or make any payments before these checks are done.
