Whenever there’s money involved, scammers are going to try and take advantage of it. According to a new release published by Canada’s Better Business Bureau (BBB), cryptocurrency fraud was Canada’s fifth-biggest scam in 2017, as it cost Canadians at least $1.7 million.
The list of Canada’s biggest scams was created with information from BBB’s Scam Tracker website, along with help from the country’s Anti-Fraud Center and concerns the community frequently brings up.
Doug Muir, from the British Columbia Securities Commission, was quoted as saying:
“Since November of 2017, the commission has received 50 complaints, inquiries, or referrals related to ICO [Initial Coin Offerings] or cryptocurrency.”
According to a report published by Motherboard, the number of scams involving cryptocurrencies in Canada doubled when compared to 2016. Alarmingly, the number of cryptocurrency crimes in the country is now five-fold greater than in 2015, presumably thanks to last year’s “cryptocurrency boom.”
Canada has, in fact, witnessed high-profile cryptocurrency fraud. Last year, a Quebec-based startup dubbed PlexCoin netted nearly $15 million from investors throughout the world, before the scheme came under fire from Canadian and US finance regulators.
To try and help potential cryptocurrency investors to keep away from fraud, Muir warned that due diligence is necessary. He stated:
“Ask questions, don’t invest in something you don’t understand. Talk to a registered advisor, know where your money’s going and how it’s going to be used, know who you’re dealing with, and check registration which can be done on our website.”
Reportedly, in Canada, a popular form of cryptocurrency fraud sees scammers approach taxpayers, demanding payments in bitcoin. The Canadian Revenue Agency currently doesn’t accept tax payments in cryptocurrency.
Ahead of cryptocurrency fraud in BBB’s list of 2017’s biggest scams in Canada were online purchases, spearphishing, and online dating scams, as well as employment scams. Below it, were tax income scams, and fake invoices.
Cryptocurrency fraud is on the rise
As covered by Core Media, cryptocurrency fraud is on the rise. Last year, the FBI arrested a banker’s brother for stealing $300,000 in two fraudulent ICOs. Similarly, Ethereum-based Prodeum pulled an exit scam on investors earlier this year, vanishing from the web after raising funds.
Before investing in ICOs, it’s important to do proper research and know how to identify a scam. Last year, security expert Lee Chen warned cryptocurrency-related hacks would increase in 2018. These may come in the form of social engineering, where scammers trick investors into believing their projects are legitimate.