Canadians lost more than $161 million to investment scams over the first six months of this year, most of which involved cryptocurrency, according to the Canadian Anti-Fraud Centre.
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In Calgary alone, police have received 340 reports of cryptocurrency-related scams so far in 2023, with victims losing more than $22.5 million.
Cryptocurrency scams usually initially appear to be investment opportunities, with promises of big returns, and often, a sense of urgency. The schemes typically involve offers to invest money in cryptocurrency, or to invest from your own crypto account, according to police.
Experts say because of its anonymous nature, the crypto market is appealing for criminals. It's an unregulated market, transactions happen quickly, and they're difficult to trace.
"There's no regulation, which makes it the Wild West," explained Glen Dobranski, vice-president of technology for Edmonton-based Solut, an IT and cybersecurity firm.
"People can put a lot of money into here, and if it goes up in smoke overnight, there's no backing on it. There's no insurance on it."
Authorities say the actual number of cryptocurrency scam victims is likely under-reported, partly because it can be embarrassing to admit you've been duped.
CTV National News spoke with a cryptocurrency scam victim who requested his name not to be published because of the personal nature of his situation.
He said he came across U.K.-based brokerage Ark Capital (also known as Ark Capitals) online in 2021 when he deposited what he believed was a $100,000 investment in various cryptocurrencies. He says he spoke to a representative on the phone weekly at first.
"And this guy just pumped me right up about cryptocurrencies," the man told CTV National News. "Just, 'Oh, it's going to be the wave of the future.'"
Initially, he said, he saw increases in the value of his portfolio. When that changed, he said, company representatives were more difficult to reach, and he tried to withdraw what money he had left in the account. He claims Ark Capital aggressively pushed him to keep his money in the account, and add more, warning him that he would miss out on life-changing monetary gains.
"And I started vocalizing, you know, 'I think I want to get out now.' It was like, 'Oh no, no! You're here for life!'…They're trying to get you off your game, and they're being nice. They're becoming your friend."
When he insisted, he claims, he was told on multiple occasions that he would get his money, by various people with the firm, but each time, there was what the company called commissions, capital gains, taxes and fees. He paid those, but never successfully withdrew his money.
"It's like, nickel and diming you, but you don't realize that those nickels aren't nickels. They're $5,000 nickels."
By late 2022, he had given around $400,000 to fraudsters.
"I'm so ashamed. I thought I was a smart guy but I got taken."
"It was so hard to tell my family… I was suffering in silence for so long, and that was so painful."
Scott McPhee from the Canadian Cyber Training Assessment Training and Experimentation (CATE) Centre at the University of Calgary says promises for big investment returns and demands for urgent action are among the red flags to watch out for when you suspect you're being targeted by fraudsters.
"I think a lot of the time, you have to kind of stop and think about this," he told CTV News.
"You want to be critical. You want to always question what they're asking you."