Here’s how to detect (and avoid) common crypto scams
Do you need to urgently provide information to the Canada Revenue Agency so they don’t arrest you for tax fraud? Or maybe you just need your ducts cleaned?
If you have a phone, email address or social media profile and you live in Canada you’ve more than likely been the target of scammers trying to steal your information, your money and your trust. These unwanted calls from people pretending to be family members, government officials and legitimate businesses are only becoming more commonplace.
“Every day we hear about people who get a phone call and it’s somebody who wants to know about a transaction on their credit card,” says Robert Watterson, managing director of Hubkoin, Canada’s safest and most-secure cryptocurrency exchange. “So they give them information.
“If you have people who are bad players or bad actors, they’re going to find ways to commit fraud.”
These scams are also targeting crypto investors. In the first eight months of 2020, Canadians lost nearly $11 million through digital currency scams, second only to wire transfer fraud, according to the RCMP.
Here’s how to detect (and avoid) common crypto scams and protect your hard-earned investments.
Avoid unsolicited communication
Like most types of fraud, it’s important to be on guard whenever you receive an unsolicited message or phone call from someone who claims to be someone you trust and is asking a lot of questions. The general rule is not to click on any links or scan any QR codes that you receive via email, text message or social media message and don’t offer any information to anyone who contacts you by phone either. For example: if you receive a call from someone claiming to be a representative from your cryptocurrency exchange of choice and they’re encouraging you to increase your investment or are asking for your personal information, end the call immediately and contact the exchange directly to continue the conversation. Similarly, if you receive an email or text message from someone trying to get you to click on a link or reveal private information, login to your account on the exchange’s website to learn more instead.
Don’t give in to pressure
Whether it’s a phone call or a What’s App message, you should never feel compelled to hand over information to a complete stranger. Even more importantly, legitimate agencies and authorities in Canada, like the CRA and police, never demand payment through the exchange of cryptocurrency. If someone is asking you to fork over some Ethereum, purchase Bitcoin from a Bitcoin ATM or give them access to your exchange details, that should be a big red flag. Since cryptocurrency is basically anonymous, and it’s difficult if not impossible to track, your coins may never be recovered.
Do your research
Finally, always make sure to verify that the organization you’re dealing with is legitimate. This starts with ensuring you choose a trustworthy and reliable cryptocurrency exchange. Some so-called exchanges are designed to steal your money. Mississauga-based Hubkoin is backed by Watterson Financial Solutions, which has been in business in Canada for 39 years.
“To me, you want to be with a Canadian controlled (exchange),” says Watterson. “You want to know the company is here for the long term.”