Canadians are losing millions in crypto to fraudsters. Here is how to spot red flags

Cryptocurrency fraud schemes are on the rise in Canada, with millions of dollars being lost by unsuspecting victims. Ontario Provincial Police are sounding the alarm and urging potential investors to take extra precautions as the popularity of digital currencies continues to grow.

Detective-Constable John Armit, who specializes in tackling crypto scams, warns that these cases are becoming increasingly difficult to solve. The decentralized nature of cryptocurrencies allows fraudsters to quickly move funds to exchanges in different jurisdictions, making it challenging for law enforcement to track and recover the stolen assets.

According to data from the Canadian Anti-Fraud Centre, Canadians have lost over $94 million to cryptocurrency scams between January 1 and September 30 of this year. In Ontario alone, victims have lost nearly $23 million to crypto investment frauds during the same period. These staggering numbers have prompted the OPP to launch Project Atlas, an initiative aimed at combatting cryptocurrency investment fraud and protecting victims both in Ontario and globally.

Armit explains that in many crypto fraud schemes, individuals are lured in by online ads promising high returns on investments as low as $250. Once victims invest their money, they are shown fake profits and encouraged to invest more. Eventually, they realize that they have been scammed and have lost both their cryptocurrency and their money.

As the value of cryptocurrencies continues to soar, criminals are increasingly targeting these assets. A recent kidnapping case in Toronto involved the CEO of a crypto company being abducted and held for a $1 million ransom. The ransom was paid electronically, highlighting the growing risks associated with owning and trading digital assets.

Since the launch of Project Atlas, investigators have identified victims in 12 countries and traced 2,000 cryptocurrency wallet addresses belonging to victims worldwide. The scale of these scams underscores the need for greater awareness and vigilance among potential investors.

To avoid falling victim to a crypto scam, Perry Quinton, manager of investor education and outreach at the Ontario Securities Commission, advises using provincially regulated companies for investing in cryptocurrencies. These platforms adhere to strict regulatory standards and provide additional protections for investors. However, Quinton cautions that investing in crypto assets is inherently risky and advises against using money that cannot be afford to lose.

Educating oneself about cryptocurrencies and how they function is crucial for protecting against fraud and losses, says Lucas Matheson, CEO of Coinbase Canada. He emphasizes the importance of skepticism and due diligence when considering crypto investments, urging investors to be cautious and avoid deals that seem too good to be true.

In conclusion, the rise of cryptocurrency scams in Canada highlights the need for greater awareness and caution among investors. By staying informed, using regulated platforms, and exercising caution, individuals can protect themselves from falling victim to fraudulent schemes in the rapidly evolving digital currency market.