Warning About Increasing Crypto Fraud

NOTE: The following is a joint statement from the Nova Scotia Securities Commission, Halifax Regional Police and Halifax District RCMP.

The Nova Scotia Securities Commission, Halifax Regional Police and Halifax District RCMP are warning Nova Scotians to be vigilant when investing in cryptocurrency assets as residents continue to lose substantial amounts of money to crypto-related scams.

The commission previously issued crypto warnings in January and March. Since then, Nova Scotians have lost more than $750,000 to crypto fraud. These are only reported losses, and since investment fraud is vastly under-reported, the actual losses are likely much higher.

Nova Scotians should be aware of two crypto-related scams that are on the rise, in addition to ongoing “pig butchering,” a type of scheme that cost Nova Scotians more than $1 million in 2022.

The new warnings are for:

• fake crypto-trading websites and platforms – unregistered platforms are being advertised, shared and promoted through social media, online forums, websites and search engine results; most unregistered platforms are located overseas even if they list a North American address on their website and often reference $250 as a safe, easy starting deposit; money deposited on these platforms is stolen, not invested
• fraudsters posing as professional or registered crypto traders – they target people interested in investing in crypto assets who do not have the technical knowledge to do it themselves and simply steal crypto assets and funds from unsuspecting investors.

Crypto asset trading is highly risky, not only from scams, but also from volatility, hacking and other risks including technology failures. People considering trading in crypto assets should remember the following to protect themselves and their money:

• when trading in crypto assets, only use crypto-asset trading platforms or dealers registered in Canada; a list of registered platforms is on the commission website at: https://nssc.novascotia.ca/registered-crypto-asset-trading-platforms
• even when using a registered platform, being told to move crypto off an established platform to a wallet that has been set up by someone else is a red flag for fraud
• giving out any personal or financial information, or downloading trading apps or software that allow computer access to another person, such as AnyDesk, creates potential for financial and identity theft
• never use credit cards or lines of credit to invest
• the perpetrators are usually located overseas outside the reach of law enforcement agencies and thus losses from crypto assets scams are often unrecoverable.

Anyone whose identity has been compromised or who has lost money because of fraud should call Halifax Regional Police at 902-490-5016. Fraud can also be reported to the Canadian Anti-Fraud Centre, which also provides information on current scams.

Quotes:

“Most unregistered platforms are located overseas even if they list a North American address on their website. They often will reference $250 as a safe, easy starting deposit, but any money deposited on these platforms is stolen, not invested, and the fraudster manufactures reports showing lucrative returns that are imaginary and false and designed to entice their victims to invest more and more money, which increases the amounts lost.”

– Paul Radford, Chair, Nova Scotia Securities Commission

Quick Facts:

• it is illegal to solicit investments in Nova Scotia without registering with the commission and complying with Nova Scotia securities laws, unless an exemption applies

Additional Resources:

Nova Scotia Securities Commission “pig butchering” alert, January 2023:
https://nssc.novascotia.ca/sites/default/files/docs/2023-01-09%20-%20Pig%20Butchering%20Scam%20warning_0.pdf

Nova Scotia Securities Commission Crypto fraud alert, March 2023: https://nssc.novascotia.ca/sites/default/files/docs/2023-03-01%20FPM%20Press%20Release%20V3.pdf

To see if a company or person is registered, check the Canadian Securities Administrators’ National Registration Search at: https://info.securities-administrators.ca/nrsmobile/nrssearch.aspx

Canadian Anti-Fraud Centre: https://www.antifraudcentre-centreantifraude.ca/index-eng.htm