{"id":27468,"date":"2022-08-09T11:49:01","date_gmt":"2022-08-09T15:49:01","guid":{"rendered":"https:\/\/www.moneysense.ca\/?p=268656"},"modified":"2022-08-09T11:49:01","modified_gmt":"2022-08-09T15:49:01","slug":"7-common-crypto-scams-and-how-to-avoid-them","status":"publish","type":"post","link":"https:\/\/www.moneysense.ca\/save\/investing\/crypto\/common-crypto-scams\/","title":{"rendered":"7 common crypto scams and how to avoid them"},"content":{"rendered":"
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\u201cCrypto investments are the top type of investment scams reported to CAFC (the Canadian Anti-Fraud Centre).\u201d This is the grim truth according to Jeff Horncastle, the organization\u2019s acting client and communications outreach officer.<\/p>\n

In 2021 alone, 1,128 Canadians reported falling prey to cryptocurrency investment scams with crypto as the payment method, with losses amounting to about $38.5 million. Things are not looking good in 2022 either. In the first six months, over 1,000 Canadians were conned, with a total loss of nearly $35 million. And these are just the cases CAFC<\/a> knows about. \u201cIt is estimated that less than 5% of Canadian victims report to the Canadian Anti-Fraud Centre,\u201d says Horncastle. <\/p>\n

Cryptocurrency scams are often intertwined with other types of scams<\/a>. According to Horncastle, \u201cIn some cases, the scam starts as a romance scam and quickly turns into an \u2018investment opportunity.\u2019 Because suspects have gained the victim\u2019s trust, it can lead to a high-dollar loss for the victim.\u201d<\/p>\n

Since cryptocurrency is an emerging technology, and crypto regulation is still evolving, investors need to tread carefully. It\u2019s possible to invest responsibly and profitably in cryptocurrencies, but the space is riddled with scams and fraud\u2014and the criminals behind them cast a wide net. \u201cUnfortunately, everyone is targeted,\u201d Horncastle says.<\/p>\n

Con artists frequently find potential marks on social media. According to a recent analysis by TradingPlatforms<\/a>, nearly one-third of social media crypto frauds happen on Instagram, and one-quarter on Facebook. <\/p>\n

There are many types of scams to watch out for, and unfortunately, as investors get savvier, the cons evolve and become trickier to spot. To protect yourself, always know where your money is going, and only use trusted and compliant crypto trading service providers. (As a starting point, see MoneySense<\/em>\u2019s picks for the top crypto platforms in Canada<\/a>, which are all registered with Canadian securities regulators.)<\/p>\n

An exhaustive list of crypto scams is likely impossible, but to protect yourself, be on the lookout for these.<\/p>\n

Pump-and-dump, or rug pull<\/h2>\n

In a \u201cpump and dump\u201d or \u201crug pull\u201d scheme, promoters of a cryptocurrency hype it up to boost demand, and when the price soars, they sell all their coins for a quick profit. Because they sell in large volumes, other investors get nervous and sell their coins, too. As panic sets in and the selling spreads, the value of the coin plunges. This makes the promoters rich and leaves many small investors \u201cholding the bag,\u201d faced with huge losses. <\/p>\n

Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cCrypto investments are the top type of investment scams reported to CAFC (the Canadian Anti-Fraud Centre).\u201d This is the grim truth according to Jeff Horncastle, the organization\u2019s acting client and communications outreach officer. In...<\/p>\n","protected":false},"author":1,"featured_media":27470,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[7,10],"tags":[],"_links":{"self":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts\/27468"}],"collection":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/comments?post=27468"}],"version-history":[{"count":0,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/posts\/27468\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/media?parent=27468"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/categories?post=27468"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.andrewwbradley.ca\/index.php\/wp-json\/wp\/v2\/tags?post=27468"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}