Cryptocurrency scams are a growing concern for Canadians, according to the Canada Anti-Fraud Centre. They’re difficult to track, and victims often lose money without any recourse.
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Scammers often use social media to attract victims by offering them an opportunity to invest in a cryptocurrency and claim high returns. They also create a sense of urgency by sharing exclusive offers on limited-time opportunities.
Scams involving cryptocurrencies
Cryptocurrency scams are an increasing problem in Canada, with victims losing millions of dollars to phony opportunities that promise big gains. These frauds are similar to traditional investment scams, but the cryptocurrency market is a new target for thieves.
There are many different types of crypto scams, and they usually take one of two forms: phishing, or transferring your cryptocurrency to an untrusted party. Phishing involves sending emails that look like they come from a legitimate organization, such as a bank or your crypto exchange or wallet provider. The emails ask you to enter your account details on a fake website, which gives the scammers all they need to steal your crypto.
In this case, the scammer can transfer your money to their own digital wallet or use it for other purposes without your knowledge. This is why it is important to only send your crypto to a secure, known wallet address.
Generally, phishing pages have an eerie resemblance to the genuine wallet or exchange you use, and they ask you to enter your crypto wallet private keys, which are the secret codes you need to access your digital assets. Once you enter your key, the scammer has full access to your account and can start spending your coins right away.
Another common type of phishing is called social engineering, and it targets your personal information. It involves posing as a government agency, tech support service, well-known business, community member, or friend and tricking you into divulging your personal information. This could be your password, a recovery phrase, or even your cryptocurrency wallet private keys.
Scams can also target your financial information, such as a bank account number or a credit card number. Scammers can steal this information through a variety of techniques, such as hacking into your online account or using a malware-based virus.
If you suspect you are being targeted by a crypto scam, contact police as soon as possible. They can help you recover your funds and stop the scammers from targeting you in the future.
If you have lost money to a cryptocurrency scam, there are two options available to you as a victim: claim a capital loss relating to your stolen cryptocurrency investments or claim a bad-debt election under paragraph 50(1)(a) of Canada's Income Tax Act. This option makes the most sense in situations where the fraudster asks you to transfer your cryptocurrency to their platform under the guise that your portfolio is being invested, and then they simply steal it by transferring it to their own wallets.
Scams involving investment opportunities
Cryptocurrency is an exciting new technology, but it also attracts scammers and fraudsters. According to Jeff Horncastle, acting client and communications outreach officer at the Canadian Anti-Fraud Centre (CAFC), cryptocurrency scams are one of the top types of investment scams that CAFC sees.
The most common scams involve people offering to sell you a cryptocurrency or a related product. They may contact you via telephone, email or social media with an unsolicited offer to purchase a crypto currency. These offers often feature high returns and promise that the investment will double or triple in value.
Another type of scam involves the use of fake celebrity endorsements. Scammers will take a real photo and impose it on an advertisement, a website or even an article in order to convince you that the celebrity endorses the scam and is making money from it.
These scams can be very convincing, and a large number of people fall for them. But they can be very dangerous if you don't know what to look for.
First, always check that the person selling you a crypto asset or a related product is regulated by a securities regulator and complies with all of its rules. Legitimate companies should be registered, and they will have a professional-looking website, business cards, logos and other identifying information.
Second, if you're buying or trading a digital asset, make sure that the company has a wallet with private keys that allows you to access it safely. Never share your wallet keys with anyone, and don't sign up to a company that asks you to do so.
Third, check that the company has a good track record of profitability. Some companies have been known to go under financially and others have been taken over by fraudsters, so check for evidence of success before investing your money with them.
Fourth, check that the company has a clear and concise business plan. It's easy for scam artists to rework an existing plan, so it's important to look for details such as the amount of capital and the expected return on your investment.
Scams involving trading platforms
Cryptocurrency scams can be a real pain, and they’re especially common in Canada. Luckily, there are several steps you can take to protect yourself from these types of scams.
First, make sure the website you’re using is legitimate and registered with your province or country’s financial regulator. If the company isn’t regulated, it’s likely fraudulent and won’t provide you with a return on your investment. You can also use a reputable anti-fraud agency’s free online reporting service.
Next, look for a website that offers a high-tech user experience and a secure login. This is especially important if you’re dealing with a large amount of money. In addition, you may want to consider a prepaid debit card or an app-based wallet.
Lastly, beware of high-pressure sales tactics, false claims of profits and unrealistic returns. These are all common tricks of the trade, so be wary of any site that tries to scam you.
If you’re looking for a fun and safe way to invest in cryptocurrencies, you might want to check out crypto trading platforms that are registered as Money Service Businesses (MSBs). MSBs are subject to Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Acts, so your funds will be much safer. The best part? Most MSBs are regulated and have security measures in place to protect your information from hackers. In the end, your safety and your financial well-being are the most important considerations. To learn more about cryptocurrency scams, read the Government of Canada’s Little Black Book of Scams.
Scams involving SIM swapping
If you use a smartphone, you have probably heard of SIM swapping (also known as port-out scams and digital SIM swapping). This is a cybercriminal technique that uses your phone number to gain access to your online accounts. It’s a common way for hackers to steal money and other personal information.
It’s important to understand how a SIM swap scam works before you get scammed. This can help you spot the warning signs and prevent damage to your financial accounts.
The FBI recently released a public service announcement that warns about this kind of scam. It explains how victims are losing millions of dollars to fraudsters.
These crimes target a weakness in two-factor authentication, which is a security feature that requires you to log into an account using a code that only you can provide. The hacker can then use your phone number to bypass the second factor, giving them access to your accounts.
When it comes to protecting your bank accounts, online shopping websites, and social media accounts, two-factor authentication is a great idea. However, it’s not a foolproof system. There are several ways that hackers can bypass this security feature.
One of these ways is SIM swapping, which involves contacting your mobile phone carrier and convincing them to activate a SIM card that the fraudsters have. Once they have your phone number, they can control it through text messages and calls, and use it to hack into your accounts.
According to the FBI, these attacks are the most prevalent type of cyber fraud. They also cost victims more than $57 million in 2019.
If you’re a victim, the first thing you should do is contact your mobile phone carrier and tell them about the issue. They can then help you fix the problem.
Another thing to watch out for is unusual activity on your social media accounts. It’s important to be aware of how your friends and family act online, because this can clue you in to a potential account takeover.
If you’re a victim of a SIM swap, it’s important to notify your mobile carrier and bank immediately. These organizations can then work together to stop the attack and restore your accounts.