BBB Scam Alert: Cryptocurrency scams trick unsuspecting Canadian investors

The Better Business Bureau (BBB) is warning Canadians to watch out for cryptocurrency investment scams, after receiving a staggering 148 million inquiries about businesses in this industry between January 1 to August 31 of this year alone. This is almost a 23% increase when compared to last year. Another 914,000 consumers have also submitted complaints to BBB about negative experiences and encounters with fraudulent companies in the same time frame, an 18.5% increase to 2019 reports.

 

Last year, cryptocurrency scams ranked number four on BBB's national list of Top 10 Riskiest Scams across Canada, with victims losing an average of $3617. The 2019 BBB Risk Report explained that almost 69% of people that reported a cryptocurrency scam lost money, and nearly one-third of these losses (31.0%) involved the cryptocurrency exchange site C2CX Exchange, a China-based digital asset exchange company which mainly trades in bitcoin. Between January 1 to August 31, victims have reported an average loss of over $1000 per person, with a concerning 50% of victims most likely to be victimized if they encounter a cryptocurrency scam. However, individual reports show victims losing as much as $8,000. The number of fraudulent cryptocurrency websites have also increased, with victims reporting the sites have disappeared or are no longer active within days of creating a profile and investing money.

 

 

Victims shared in their reports to BBB Scam Tracker that they engaged with the fraudsters in various ways, including through:

 

 

 

"They create false profiles on LinkedIn and say they are CFOs inviting you to a business opportunity. The business is where you have to invest a min. of 500USD as part of a trial, but payment made in bitcoin, then they promise you large returns. They then tell you that your profits were higher than expected and that you have to invest a further 2500 usd in bitcoin to receive 19000 USD profit....when you do this, they then tell you that your trade is closed and you have to put a further 15% of the profits in bitcoin....don't do that!....you will never get back your money!!!"

 

In most cases, the victims were promised large guaranteed returns on their investment - as much as 20%. Some of the scammers baited victims into spending more money by encouraging them to invest small amounts and giving them the promised returns. However, once they get comfortable and trusting and decide to invest much larger amounts, the scammers stop communicating and disappear with their money. Others victims were told that they had to spend more money in order to help fix system glitches, pay for taxes, commission and other fees or simply receive their payouts. Some reports shared how scammers claimed they were unable to execute the payouts due to COVID-19.

 

 

"I was looking for a way to invest my cryptocurrency and ran across CryptoExchangeFX.com. Initially the deal seemed impossible (20% return) so I did the basic scam searches and came up with more positive reviews than anything else. I figured it was worth a shot to see how it worked out so I decided to deposit the minimum amount and see if I got the return. Their site has the crypto you have deposited and countdown timer. When the time hits zero, I got an email requesting an address to send the funds. After promptly receiving the promised payout, I decided to make another investment. After the wait time the counter again hit zero and then nothing happened. I contacted customer support and was told there was an error when I deposited and that to fix it I would need to add more funds. I did and then promptly received an email saying that I attempted to withdraw too soon and that was marked as a spam attack so my account was frozen... I was told the only way to lift the suspension would be to deposit $1500 worth of crypto into the account. I was torn on if I was being scammed because I had received the first payout. We agreed on $500 to lift the suspension. I was told by customer support to make another deposit of $600. I waited a couple of days and then contacted them again. They said that they were upgrading their system when I made the deposit, that they couldn’t confirm I had sent the money and that if I deposited an additional $1500 they were sure it would lift the suspension. But I did not have any more money to deposit... Since then they have simply ignored my emails."

 

The fraudsters also tricked many victims into sharing personal and financial information, requesting details like voided cheques, copies of their drivers licence, credit card information and mailing addresses.

 

In a handful of cases, the scammers pretended to be employers, and asked unwitting job seekers to purchase bitcoin and deposit it to specific virtual wallets as part of their duties. The money was deposited to their account from random third parties. Investigations show that the money was coming from scam victims believing they were investing in legitimate schemes. The job seekers were also victimized, as they believed they were legitimately employed. However, they were in fact being used to facilitate the scam, allowing the perpetrators to remain anonymous. Victims reported the scammers were using company names like Satterley Enterprises, Alteora Solutions and Vihem Business Solutions.

 

 

"This company got my resume from Indeed.com and contacted me offering me employment. The job offer was to work from home, and the salary was very good. The job offer was given to me without an interview. It offered a position dealing with investments. I have no skill set or interest in this field. They asked for more personal information with the employment acceptance letter. They asked me to create a personal account, accept the money coming in, transfer it to bitcoin on bitbuy and then send the bitcoin back to them. After reading a couple articles online, I realized how sketchy this seems and didn't seem right. I started researching the company and came across scam warnings online."

 

"Fraudsters continue to create and utilize sophisticated schemes that not only target persons interested in exploring potential investment opportunities, but also those seeking employment," explained Karla Laird, Manager for Community and Public Relations at Better Business Bureau serving Mainland BC. "Do not risk losing hard-earned money and life savings on the promise of guaranteed high interest returns with cryptocurrency. There is no guarantee or certainty with these types of investments. Speak to a certified financial adviser about what investment opportunities are best based your financial situation."

 

 

 

 

 

 

 

Read more about cryptocurrency at BBB.org/Crypto. 

 

Always look for businesses that follow BBB Accreditation Standards and BBB Standards for Trust. 

 

If you are the victim of a scam, report your experience to BBB Scam Tracker. Your report can help others to stay informed and avoid similar scams.