Red Deer residents have reported $200,000 in cryptocurrency thefts and scams this year, says RCMP.
Police remind those looking to invest in cryptocurrencies to do their homework and research the company or exchange they plan to use to avoid becoming a victim.
There are a number of red flags potential investors should look out for, such as dealing with an unregistered exchange or broker and facing excessive fees. Other warnings signs include little to no collection of personal information and being submitted to high-pressure sales tactics.
Online reviews warning of scams should also be taken seriously.
Investors are more likely to avoid being scammed if they choose an exchange or broker registered with a provincial securities commission or FINTRAC (Financial Transactions and Reports Analysis Centre of Canada). FINTRAC IS Canada’s financial intelligence unit and assists in the detection, prevention and deterrence of money laundering and the financing of terrorist activities.
Also look for multiple positive online reviews from different cryptocurrency news sites.
Police also say be wary of Initial Coin Offerings. They appear frequently (there are currently over 10,000 different cryptocurrencies) and some are simply scams.
There are a number of reputable Canadian based exchanges, as well as international-based exchanges, but there are also some that are outright scams, say police.
“Do not trust everything you see on the internet. If something feels off about the company or exchange, look into it more before trusting them with money.”
People routinely put hours of research into buying a TV, vacation or car and cryptocurrency investing should be no different.
“If you are going to trust a company with potentially thousands of dollars, treat it the same as buying a car,” says RCMP. “Read up on the exchange, the cryptocurrency you are buying and in general, educate yourself about what you are doing before committing to it.”
If you are the victim of a cryptocurrency related crime, report it to your local police department. Despite what some reports claim, Bitcoin and other cryptocurrencies are not “untraceable”.
The Red Deer RCMP Fraud/Cybercrime unit have officers experienced in these complex investigations.