February 17, 2022, Dartmouth, Nova Scotia… In recent weeks the Nova Scotia RCMP has noticed an increase in criminal offences involving cryptocurrency. Typically, these offences involve the loss of tens of thousands of dollars per incident, with some exceeding $100,000.
Bitcoin Investment Scams:
Criminals create fake cryptocurrency investment websites, which are often located outside of North America and out of reach for Canadian Law Enforcement. They attract victims with the promise of returns that seem too good to be true. Victims invest their money and begin to see large increases in their investments. Victims are usually pressured to then invest more money for even greater returns. When the victim decides to cash out, the fake website will not allow it. Often times the suspects will ask for another large withdrawal fee, which of course is just another scam to steal more money from their victims. These websites usually disappear shortly thereafter, and the victims are out thousands of dollars.
Many of these scams begin on social media where victims are approached by a person online who pretends to be romantically interested. After a while the suspects begin to introduce the idea of investing in cryptocurrency, and convinces the victims to invest in a particular (fake) cryptocurrency investment or exchange. In other instances, victims of Romance Scams have been convinced to accept money transfers, and to then withdraw the funds to purchase Bitcoin, typically through a Bitcoin ATM. The money transfers are usually redirected funds from scams such as Business Email Compromise scams, where employees are tricked into forwarding account payments to a new account. In these instances, victims are unknowingly laundering money from criminal offences into a Bitcoin account held by the suspects.
To be safe, it’s recommended that people do diligent research and only invest in companies registered with a Canadian Securities Commission, such as the Nova Scotia Securities Commission. Of note, it is illegal for a person or company to solicit investments in Nova Scotia without registering with the Commission and complying with Nova Scotia securities laws, unless an exemption applies. You can report cryptocurrency investment scams to both the RCMP and the Nova Scotia Securities Commission.
There have been instances where victims have had their Bitcoin stolen from an exchange. In two known instances victims sought out online support for their cryptocurrency in a legitimate exchange. Instead of finding the exchanges real customer support webpage, they found links that lead them to criminal actors. These criminals, pretending to be online support, convinced the victims to download a remote access software which allowed the suspects to access the victim’s cryptocurrency wallet and withdraw all the funds.
It’s important to ensure that you are on the businesses legitimate webpage, whether that is through regular online banking or cryptocurrency exchanges. Criminals can easily create fake webpages that resemble your banking or cryptocurrency login webpages. You can confirm you are on the correct webpage by ensuring that the URL (web address) is correct.