You’ve likely seen news stories about the changing value of various crypto currencies and other crypto assets. And you may be curious about whether investing in crypto could lead to a windfall. But remember that new investing technologies, like crypto trading platforms, still come with the same old cautions: buyer beware.

Consider Emma’s experience (based on real events):

Emma became interested in crypto investing after reading articles condemning traditional market returns and promoting crypto as a smart alternative. On social media, she was enticed by an ad promising huge annual returns of 502%.

The company’s professional looking website made Emma feel confident about investing with them. She provided her bank account number to the crypto trading platform. She also downloaded an app the company said would make the investment process easier for her.

Emma thought she was wisely investing a small amount from a recent $1 million inheritance. Weeks later, Emma discovered all her money was transferred overseas.

When she contacted the OSC, she learned the person she’d dealt with was subject to previous enforcement action. Since he was overseas, the chances of retrieving her money were slim.

8 red flags of crypto fraud

  1. High pressure sales tactics: you keep getting multiple calls from the company telling you to act now or you’ll miss out.
  2. No trading experience needed: you’re told not to worry about a lack of trading knowledge. They tell you it’s all done automatically for you, so you don’t need to know anything.
  3. Trojan horse: you’re told to download an app on your computer that actually gives the fraudsters access to your computer (such as AnyDesk).
  4. Too good to be true: you’re shown online account details with unrealistic, rapid growth, to try and incentivize you to invest even more money.
  5. Guarantee of high returns: you’re promised unrealistic returns, such as 300% growth.
  6. Deceptive good looks: just because a website appears slick and professional, doesn’t mean it is legitimate. And just because a celebrity’s photo is on promotional materials, does not mean the famous face actually endorses the company.
  7. Paying more to get less: you’re told you must provide more money before you can make any withdrawals.
  8. Disappearing act: you can’t reach anyone when you make a request to withdraw money.

There are several crypto trading platforms that have taken steps to be registered in Canada. These platforms are subject to regulatory oversight that helps protect investors. You can check to see if a crypto assent platform is registered in Ontario.

If you are concerned about a crypto scam, the OSC is here to help. Contact us at 1-877-785-1555 or email to [email protected].

Recommended Webinar: Avoiding the TRAPS of Frauds and Scams


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Author: Ontario Securities Commission