Crypto Scams Emerge as Canada’s #5 Money Crime in 2017
Bogus cryptocurrency investments have made their debut on Canada’s annual top 10 list of money scams, going straight to number five in the 2017 ranking, Canada’s Better Business Bureau (BBB) said.
“Since November of 2017, the commission has received 50 complaints, inquiries, or referrals related to ICO [Initial Coin Offerings] or cryptocurrency.”
ICOs are an unregulated digital form of crowdfunding used by startups to raise money. These events allow companies to bypass the stringent rules imposed by banks or venture capitalists in regulated capital-raising activities. Participants in ICOs receive digital tokens or coins for their investment with a promise of hefty returns when the business takes off and the cryptocurrency is traded into fiat money.
But Muir warned that sometimes the project is bogus and investors lose their money. He advised the public to do the necessary due diligence before investing, especially in financial instruments they have little knowledge of.
“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,” Muir added.
Another form of cryptocurrency fraud involves scammers approaching taxpayers and demanding tax payments in Bitcoin, but the Canadian Revenue Agency currently does not accept the cryptocurrency.
According to BBB’s top 10 list of scams in 2017, online purchases retain their lead, followed by wire fraud/spear phishing. Online dating and employment scams rank third and fourth, respectively. The rest of the list is rounded off by fraud related to income tax, weight loss programs or products, advance fee loans, dubious contractors, and bogus invoices. Last year, Canadians lost C$95 million to scams, which amounts to a 50% increase since 2015 and represents losses from reported fraud only.
Crypto scams on the rise
We reported earlier that cryptocurrency-related scams have seen a steady rise this year worldwide and are getting more personalized.
Amongst the most notable cryptocurrency crimes are ICO scams, exchange scams, impersonation scams, fake giveaways, and pyramid schemes.
In Asia, the expanding cryptocurrency market is attracting fraudsters and hackers who target amateur investors whose financial literacy has failed to keep abreast with the growth in this space.