Warning issued as crypto scams skyrocket in BC

A warning was issued this week after crypto investment scams nearly tripled last year.

British Columbians reported combined losses of nearly $24 million due to crypto fraud in 2022, nearly three times the $8.5 million in losses reported a year earlier, according to the Canadian Anti-Fraud Centre.

“Canadians lost a staggering $530 million to fraud and cybercrime in 2022, a 40 per cent increase from 2021,” said a statement issued by the BC Securities Commission, the BC RCMP and the Anti-Fraud Centre.

That disturbing sum is likely only a fraction of the real losses, because the center estimates that only five to 10 percent of fraud victims report it.

Police and financial experts warn that crypto has become a go-to for fraudsters.

“Fraudsters are using the popularity and complexity of cryptoassets to target vulnerable investors, especially on social media,” the statement said.

Recent Securities and Exchange Commission research shows that young adults are more likely to turn to social media for advice and information about making investments and are much more likely to make speculative and risky investments, including 18 percent who have investments in crypto.

A new ad campaign from the BC Securities Commission is urging investors to look for red flags when looking at crypto, some of which aren’t obvious. They include:

• Promises of guaranteed high returns: All investments are inherently risky, so guarantees are questionable.

• Complicated jargon and language that is difficult to understand: “Fraudsters often exploit the mystique of complex new technologies, such as blockchain or artificial intelligence, to project a veneer of expertise and authority.”

• Unsolicited offers: Be careful if you receive unsolicited communications via email, phone, pop-up ads, Internet videos, or social media instant messages.

• Press to buy: Scammers may try to create a false sense of urgency to take advantage of an investment before it’s too late. Take the time to do your research, including speaking with a registered investment professional, before making a decision.

Another way to reduce your risk is to buy and sell cryptoassets only on cryptocurrency exchanges registered with Canadian securities regulators.

“If promises of high returns on an investment seem too good to be true, you’re probably right,” said Insp. Kurt Bedford, Acting Officer in Charge of BC’s Financial Integrity Unit. “While our dedicated investigators at the BC RCMP’s Financial Integrity Unit work hard to solve some of the most complex financial crime-related offences, investor education and prevention remains the first line of defense against becoming a victim of investment fraud.”

Anyone who believes they have been a victim of cybercrime or investment fraud should report it to the police, the Anti-Fraud Center (online or by phone at 1-888-495-8501) or the BC Securities Commission.