I came across an article today from City News about a crypto scam. It hurts me when I hear about newbie investors falling prey to these types of scams. This is exactly one of the reasons why this blog exists, it's meant to be a resource for new investors entering the crypto market. Because crypto is a new asset class, most people who are new, don't fully understand what this entire space is about.
Fear and greed drive these markets and if you can't protect yourself from yourself, you'll be falling for scam deals like these. And it only takes one bad experience for new investors to stay away from crypto because of a lack of education.
I've written about what you should be looking for in a crypto project, and the most important things to understand about making an investment decision that could impact your financial well-being. If you haven't you should read these tips about cryptocurrency security and best practices. It could potentially save you from a lot of headaches.
Here's a quick rundown of the main points of this Canadian crypto scam.
- There is a widespread crypto-related scam taking place in Nova Scotia, which has resulted in numerous victims suffering substantial losses.
- The Nova Scotia Securities Commission has referred to this scam as a "pig butchering" scheme.
- Victims of the scam have lost hundreds of thousands of dollars, including those in Nova Scotia, the rest of Canada, and the United States.
- The scam usually begins when victims receive an unsolicited message through text, email, social media, or by clicking on a crypto trading ad on a social media site.
- The scammer builds a relationship with the victim and convinces them to deposit money into a crypto trading account, providing fake statements showing large gains to persuade the victim to invest more money.
- The scammer demands fictional taxes or fees before disappearing when the victim tries to withdraw their money.
- The scammers gain access to the victim's deposited funds and personal and financial information through the crypto account and trading apps or file-sharing software.
- Victims of this type of scam are unlikely to recover their money and are advised not to respond to unsolicited requests or ads asking for more money to recover losses.
- These scammers are skilled at covering their tracks and generally operate outside of North America, beyond the reach of Canadian and U.S. securities regulators.
- There is usually not much that can be done to help victims of this type of scam.
Please, if you don't understand something, never put your money behind it. Never send money to strangers, especially those that contact you through some email, or text messaging app about investment opportunities. There are countless ways in which scammers fool people into giving up their money, this is known as investment schemes.
Scammers pose as experienced "investment managers" in bitcoin investment schemes and say they have made millions investing in cryptocurrency.
They tell their victims that they will make money through investments, but instead of making money, they steal the fee that they ask for upfront to get started.
Scammers may also ask for personal identification information, saying it is needed to transfer or deposit funds. This gives them access to a person's cryptocurrency.
Fake celebrity endorsements are used in another type of investment scam.
Scammers use real photos and put them on fake accounts, ads, or articles to make it look like the celebrity is promoting a big financial gain from the investment.
These fake endorsements use well-known company names, like TD Ameritrade, and have websites and logos that look professional, but the endorsement is not real.
I personally know of a friend who fell for this exact trap, and I tried to warn him. He swore it was real because he made a few hundred which the scammer sent to my friend's cash app.
The scammer then promised bigger payouts if they would invest more. I'm telling you know, if you don't check your greed at the front door, someone will use you as bait.
Please, don't fall for these scams, and do your own research before investing. You can potentially save yourself from a lot of headaches by using just a little bit of common sense.
Once your crypto is gone, it's usually next to impossible to get it back.