Canada’s Anti-Vlad Centre (CAFC) told Moneysense that in 2024, Canadian Canadians who invested in scams were linked to cryptocurrency investment, and “more than 50%” were linked to cryptocurrency investment. Crypto investment is the best type of investment scams reported to CAFC. It is estimated that the reported scam is less than 5%, so the actual loss may be higher.
Scammers often find victims on social media
Cryptocurrency scams are often intertwined with other types of scams, while the criminals behind them throw a wide range of nets. Scammers often find potential traces on social media. According to analysis by TradingPlatforms based on FTC data, nearly one-third of social media encryption fraud occurs on Instagram, while one-quarter on Facebook.
Some ruses start with romantic scams. Once the victims are suspected of gaining trust and feelings, they offer “investment opportunities” or ask cryptocurrency or money to pay fictitious expenses such as medical expenses.
CAFC client and communications outreach officer Jeff Horncastle noted that crypto investment scams often start with relationships and romantic fraud. The fraudster establishes relationships with the target and gains trust. They then convinced their targets to invest in fraudulent crypto platforms (even guiding them on how to do this) and promised huge returns. Initially, the goal can even deliver on their profits. They fooled the platform was legal and they invested more money. But when they try to withdraw funds, they find that they can’t, and their lover’s interest may also disappear.
10 encryption scams
There are many types of scams to be aware of, and unfortunately, as investors become more stable, the drawbacks develop and become more tricky. To protect yourself, always know where your money is going, understand Canadian crypto advertising rules, and use only trusted and compliant crypto trading service providers. (As a starting point, see the Moneysense draft picks of Canada’s top crypto platforms, where all securities regulators have approved business in the country.) An exhaustive list of crypto scams may be impossible, but to protect yourself, here are 10 places to watch.
The best encryption platforms and applications
We rank the best crypto exchanges in Canada.
1. Pumping or tensioning force
In the “pump and dump” or “carpet pull” scheme, promoters of cryptocurrency hype can increase demand, and when prices soar, they sell all coins for quick profits. Because they sell in large quantities, other investors will also feel nervous and sell coins. As the panic begins and the sales spread, the value of the coin falls. The promoters became rich, and small investors were “holding the bag” and faced huge losses.
An example of the infamous alleged crypto pump and point drop program is a coin called Squid Game. It launched in October 2021 and it won the popularity of the same name Netflix series, albeit without affiliation. Less than two weeks later, the crypto developer of Squid Game suddenly sold the coin at $2,800, which made itself rich by $3.3 million (all in U.S. currency). Today, a squid coin is worth about one cent.
Of course, pumping scams aren’t unique about encryption. This is Goofy stockbroker Jordan Belfort – Theme of Hollywood movies The Wolf of Wall Streetstarring Leonardo DiCaprio – participated in the 1990s. His company was accused of artificially exaggerating the price of a cent of stocks and then selling its stocks to earn a lot of money, bringing investors up to $200 million. In the early 2000s, Belfort served in federal prison for securities fraud for 22 months. He is now marketing as an investment guru.
