British Columbians urged to learn the signs of a crypto scam as losses reach historic levels
Vancouver — The B.C. Securities Commission (BCSC), B.C. RCMP and the Canadian Anti-Fraud Centre (CAFC) are urging British Columbians to protect themselves from crypto investment fraud by learning how to spot the signs of a scam.
In 2022, British Columbians reported combined losses of nearly $24 million in crypto scams, almost triple the $8.5 million reported the year before, according to CAFC data. Canadians lost a staggering $530 million to fraud and cybercrime in 2022, a 40 per cent increase from 2021. The real cost is likely much higher. Only 5 to 10 per cent of victims report fraud, CAFC data shows.
Scammers are using the popularity and complexity of crypto assets to target vulnerable investors, particularly on social media. Recent BCSC research shows young adult investors in B.C. are more likely turn to social media for investing advice and information and that they are taking a more speculative and risky approach to investing, with 18 per cent holding only crypto investments.
For Fraud Prevention Month, the B.C. RCMP, BCSC and CAFC want British Columbians to empower themselves with the information they need to spot crypto and other online investment scams.
As part of that effort, a new BCSC advertising campaign aims to show that not all crypto scams are obvious, but you can learn to spot the red flags. You can find out more about the campaign by visiting cryptoscams.ca, a new feature of InvestRight.org, the BCSC’s investor education website.
Investors can protect themselves by recognizing the following characteristics of a crypto scam:
- Promises of “guaranteed” high returns on an investment: All investments have risk. Investors should question any investments that have a “guaranteed” return.
- Complicated jargon and language that is difficult to understand: Scammers often exploit the mystique of complex new technologies, like blockchain or artificial intelligence, to project a veneer of expertise and authority.
- Unregistered salesperson: Many investment frauds involve individual or firms that aren’t registered to buy or sell investments. Always check AreTheyRegistered.ca before investing.
- Unsolicited offers: Be extremely cautious if you receive unsolicited communication over email, by phone, pop-up ads and videos on the internet, or direct messages on social media.
- Pressure to buy: Scammers may try to create a false sense of urgency to take advantage of an investment “before it’s too late.” Take your time and research an investment opportunity, ask questions, and talk to a registered professional before making a decision.
You can also reduce your risk when buying and selling crypto assets by using crypto trading platforms (also known as “cryptocurrency exchanges”) that are registered with Canadian securities regulators and avoiding platforms that are banned.
Anyone who suspects they have been a victim of cybercrime or investment fraud should report it to their local police, the CAFC (either through its online reporting system or by phone at 1-888-495-8501) or to the BCSC.
Kurt Bedford, acting Officer in Charge of the BC RCMP Federal Serious and Organized Crime Operations and Financial Integrity unit (FSOC FI)
“If promises of high returns on an investment seem too good to be true, you’re probably right. Although our dedicated investigators at the BC RCMP Financial Integrity unit work hard to solve some of the most complex financial crime related offences, investor education and prevention still remain the first line of defence against becoming victims of investment fraud.”
Sgt. Guy Paul Larocque, Acting Officer in Charge at the CAFC
“Investment scams, including crypto scams, have been targeting and stealing Canadians' hard-earned money. With reported fraud losses reaching an all-time high, the CAFC wants to urge everyone to take the time to research investments and understand fraudsters’ tactics before ever sending money or personal information. Take advantage of the CAFC’s and our partners’ online resources, and always report fraud. The CAFC uses your reports to assist law enforcement and inform public awareness efforts.”
Doug Muir, Director of Enforcement at the B.C. Securities Commission
“Investing in crypto is risky, and one of the biggest risks is outright fraud. You could lose all your money. British Columbians should check out the BCSC’s investor education website, InvestRight.org, to learn about the warning signs of crypto fraud and other information that can help everyone make informed investment decisions.”
About the B.C. Securities Commission (www.bcsc.bc.ca)
The B.C. Securities Commission is the independent provincial government agency responsible for regulating capital markets in British Columbia through the administration of the Securities Act. Our mission is to protect and promote the public interest by fostering:
- A securities market that is fair and warrants public confidence
- A dynamic and competitive securities industry that provides investment opportunities and access to capital
Learn how to protect yourself and become a more informed investor at www.investright.org
About the Canadian Anti-Fraud Centre
The Canadian Anti-fraud Centre (CAFC) is Canada's central repository for information about fraud. The CAFC is jointly managed by the Royal Canadian Mounted Police, the Competition Bureau Canada, and the Ontario Provincial Police.
Senior Strategist, Brand Marketing and Research
Cpl. Marc Desautels