Digital currency fraud in Canada has surged in the past four years, police have reported. According to the Royal Canadian Mounted Police (RCMP), this type of fraud has shot up 400% in the past four years.
Canada’s digital currency industry has been thriving in recent years. Despite the fall of QuadrigaCX exchange in controversial circumstances, Canadians have continued to adopt digital currencies, with studies showing that three in four Canadians know what Bitcoin is.
With the rapid adoption has come an unfortunate rise in digital currency fraud. Kris Clark, an organized crime RCMP officer told local outlet Global News, “Cryptocurrency fraud is increasing dramatically in Canada, with a difference of more than 400 per cent between 2017 and 2020.”
He added, “Canadians lost nearly $11 million (US$8.7 million) through digital currency scams alone, in the first eight months of 2020.”
Digital currency scams have varied over the years, ranging from those targeting victims’ greed such as “double-your-money” scams to those targeting intimidation such as extortion scams. In recent times, fraudsters have been targeting lonely victims, pretending to be romantically interested in them before luring them to send digital currencies.
In Vancouver, authorities said local residents lost $2 million to digital currency scams in a single week earlier this month. As per the Vancouver Police Department, such scams have tripled this year.
Tania Visintin, the spokesperson for the department commented, “Predators will often exploit two powerful human emotions – greed and love. Victims are typically lured in with the idea that they will be a part of an opportunity to make money or in other cases, they will be doing a friend or romantic interest a favour.”
According to CTV, extortion scams are growing fast in Canada. In 2020, Canadians lost $10 million to these scams. While digital currencies weren’t involved in all these scams, they made up a sizeable percentage of the ransom payments.
“There is going to be some threat by nature or coercive nature and they are going to be asked to pay by Bitcoin. When it comes to these scams this is what we are seeing,” Jeff Thomson, an RCMP investigator stated.
Digital currency regulations will be key to stopping the rampant crime. As CoinGeek reported, most jurisdictions have implemented new laws to govern the industry, seeking to stamp out the scammers from an industry that’s becoming formidable across the world.
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups-from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.