The Nova Scotia Securities Commission, along with Halifax Regional Police and the RCMP, have issued a warning to be vigilant when investing in cryptocurrency “as residents continue to lose substantial amounts of money to crypto-related scams.”
“The commission previously issued crypto warnings in January and March. Since then, Nova Scotians have lost more than $750,000 to crypto fraud,” said a joint statement from the commission and police.
“These are only reported losses, and since investment fraud is vastly under-reported, the actual losses are likely much higher.”
The release said there are two crypto scams that are on the rise. There are fake crypto-trading websites and platforms being advertised over social media, online forums, websites and search engine results.
“Most unregistered platforms are located overseas even if they list a North American address on their website,” said Paul Radford, chair of the Nova Scotia Securities Commission in the release.
“They often will reference $250 as a safe, easy starting deposit, but any money deposited on these platforms is stolen, not invested, and the fraudster manufactures reports showing lucrative returns that are imaginary and false and designed to entice their victims to invest more and more money, which increases the amounts lost.”
The other scam involves fraudsters posing as professional or registered crypto traders, who target people interested in investing in crypto who do not have the technical knowledge to do it themselves. The fraudsters then “simply steal crypto assets and funds from unsuspecting investors.”
These two scams are in addition to an ongoing scheme referred to as “pig butchering,” which the province issued a warning about earlier this year.
The release noted that crypto trading is “highly risky, not only from scams, but also from volatility, hacking and other risks including technology failures.”
Those considering trading crypto should ensure they are only using platforms or dealers registered in Canada. A list of registered platforms can be found on the securities commission website.
“Even when using a registered platform, being told to move crypto off an established platform to a wallet that has been set up by someone else is a red flag for fraud,” the release said.
As well, people should never give out any personal or financial information, download trading apps or software that allows computer access to another person, or use credit cards or lines of credit to invest.
“The perpetrators are usually located overseas outside the reach of law enforcement agencies and thus losses from crypto assets scams are often unrecoverable,” it said.
Fraud can be reported to police or the Canadian Anti-Fraud Centre.
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