The British Columbia Securities Commission (BCSC) talked about the rise of cryptocurrency scams at the BBB of the Lower Mainland’s Top 10 Scams event on February 28.
The Top 10 Scams is an annual list of scams across Canada. Not all of the items on the list involve investments, but it’s a good idea to be aware of what fraudsters are doing to try and take your money.
Cryptocurrencies are digital assets with properties that vary widely. Not all cryptocurrencies are securities, but some may be considered securities in certain situations.
Initial coin offerings happen when a company issues its own cryptocurrency. Buying into an ICO may mean you own cryptocurrencies that can be redeemed for products or services in the future, and you may be able to trade the coins with other people if a market exists. Every ICO is different; investors should read the documentation about the offering to understand how coins are valued and used.
Cryptocurrency & Initial Coin Offering Scams
Doug Muir, the BCSC’s Director of Enforcement, spoke about how cryptocurrency scams can attract investors.
“ICOs and cryptocurrencies are being used for frauds and scams,” Muir said.
Fraudsters take advantage of the fact that cryptocurrencies and ICOs are new for a lot of investors. They use similar tactics as other scams, including high-pressure sales and promises of high returns with low risks.
How to Report Cryptocurrency Scams
Investors can report a cryptocurrency or ICO scam to the BCSC. We accept tips and complaints in the following ways:
- Online using our Report a Concern form
- Over the phone at 1-800-373-6393
- Via email at [email protected]
- Through the mail to the BCSC office
March is Fraud Prevention Month
During Fraud Prevention Month, BCSC InvestRight encourages investors to learn how to recognize, reject, and report investment fraud.
It helps to know the warning signs of investment fraud. These five signs can help investors assess if an opportunity is a scam.
There are guides, videos, and other resources in the Fraud Awareness section of InvestRight.org.
Report a Concern
If you have any concerns about a person or company offering an investment opportunity, please contact BCSC Inquiries at 604-899-6854 or 1-800-373-6393 or through e-mail at [email protected] You can also file a complaint or submit a tip anonymously using the BCSC’s online complaint form.
Learn about new 2020 CSA research on what investors know about fees and their investments, and how they interact with investment advisors.