Canadian flag over map

Digital currency scam exploding in Canada, consumer group warns

Digital currency scam is exploding in Canada, a local consumer group has warned. Canadian investors have lost millions of dollars to scammers, according to the Better Business Bureau Serving Southern Alberta and East Kootenay (BBB), describing the local digital asset market as a Wild West.

The consumer group says it has received eight complaints about digital currency scams. “It’s kind of the wild west in the crypto asset market right now. It’s a big problem. It’s exploding,” the group’s Wes Lafortune commented, speaking to Global News. 

Lafortune told the outlet that the median amount that investors report losing to these scams is $600, but there have been cases when investors have allegedly lost millions of dollars.

Canadian regulators are still grappling with the fast evolution of the digital currency sector. While the country was among the first to approve a digital asset ETF, way before U.S. regulators got on board, it has yet to issue definitive policies to protect investors in the space.

Lafortune called on investors to do their own research before investing in any project and never let any salesperson rush them into investing their money in any project.

“It’s a bit of the gold rush mentality. People want to make a quick buck and there’s promises of huge profit, huge gains and those usually don’t materialize,” he said.

The consumer group was responding to one of the victims of the digital asset scams. According to Global News, Calgary resident Isabelle Lévesque lost $2,500 to a company known as TrueNorthBit.

Regulators in Canada are aware of the scams but cannot do much for victims once the money is lost. The Alberta Securities Commission told the news outlet that it has been receiving complaints from investors and together with the Canadian Securities Administrators, it had issued several warnings to the public.

The best way to fight these scams is to educate the investors about the red flags with digital asset investments to ensure they don’t fall prey, which it has been doing extensively, the watchdog said.

Watch: CoinGeek New York panel, Investigating Criminal Activity on the Blockchain

YouTube video

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.