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Cryptocurrency fraud is a scheme where fraudsters create fake investment platforms that promise high returns. These platforms are publicized through social media. Sometimes false representatives even solicit victims directly.

“For a while, victims believe their investment is generating big returns. They realize they have been scammed only when they are asked to pay more money to withdraw their fake winnings and find that they can no longer withdraw their assets from the platform.” ⁽¹⁾

Cryptocurrency fraud is part of the broader category of investment fraud, which is the type of fraud that has resulted in the largest financial losses to Canadians in 2021 ⁽²⁾. Last year, the Canadian Anti-Fraud Centre (CAFC) recorded 3,442 complaints of investment fraud in Canada, totaling losses of $163.9 million.

According to the CAFC, fraudulent investments in Quebec have cost more than $3.4 million to people over the age of 60.

In reality, the numbers are probably much higher, as it is estimated that less than 5% of fraud victims report their experience to the police ⁽³⁾.

Prevention tips

Here are some tips for preventing cryptocurrency fraud.

• Visit the website of the Autorité des marchés financiers to stay informed on current trends in fraud and cryptocurrency. The website features a registry of authorized brokers and a blacklist of fraudulent websites.
• Don’t let yourself be misled by a visually appealing website or dynamic platform. Fraudulent sites are well designed and give the appearance of being professional and dependable.
• Verify the legitimacy of the person you are speaking with, whether in person, by phone, by email or by Internet. To provide a legal financial service, the person you are dealing with must be licensed. Beware of so-called foreign-licensed advisors soliciting clients in Canada.

Report fraudsters

If you believe you’re the victim of cryptocurrency fraud, report it by contacting:

• Your bank
• Local police
• Sûreté du Québec
  911
  310-4141 or *4141 (cellphone) for municipalities with no 911 service
• Canadian Anti-Fraud Centre
  1-888-495-8501
  Online reporting system
• Crime Stoppers
  1-800-711-1800
  Online reporting system

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A reminder that FADOQ’s Senior-Aware program offers information sessions to encourage discussion and provoke reflection through the presentation of videos on key concepts related to elder fraud.

For more about the Senior Aware program, consult the program’s website.

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Sources

(1) La fraude en 3D

(2) Top 10 frauds in 2021

(3) How to report fraud and scams in Canada