The Ontario Provincial Police, in partnership with other Ontario police services, have been investigating a rising number of internationally-based brokerage frauds that have been taking advantage of the emerging demand for financial services involving cryptocurrencies by Ontario residents.
These firms use various brokerage names that claim they can assist victims with investing in cryptocurrencies. They are known to register businesses overseas, create webpages, and advertise online. Once in contact with the potential investors, the broker will pledge to provide the victim with an investment professional who will guide and assist them in all of their trading activities. Victims are then encouraged to allow remote access to their computer by the scammers.
The scammers then make use of the victim’s computer to open a cryptocurrency exchange account at Canadian cryptocurrency exchanges, not involved in any fraud, with the victim’s assistance. Once the scammers get the victim to fund the cryptocurrency wallet set up on the exchange they immediately send the funds to a network of crypto‐addresses controlled by the scammers.
Victims are sometimes provided access to an online trading platform to utilize, and then, not coincidentally, always seem to see profits in the early stages of the venture, which entices them to increase their participation until they attempt to withdraw some of their alleged earnings. When a withdrawal attempt is made, the common practice is an account lock or the victim submits a withdrawal request where the scammers in turn advise them of problems where the victim allegedly needs to provide more funds to have funds released.
These scams can be avoided by simply taking the time to properly research cryptocurrency trading and investing and any firm you intend to deal with. Cryptocurrencies are “decentralized” which in part means that participants generally do not deal with intermediaries or third parties in order to participate. In Canada, anyone in the business of trading securities or advising clients on securities must be registered with the securities regulator in each province or territory where they do business, unless an exemption applies. Members of the public are advised to never give remote access of their home computer to any unknown person, and not to trade in, or withdraw, digital assets under the direction or control of unknown third parties.
More information is available by The Ontario Securities Commission (OSC):
List of registered crypto asset trading platforms with the OSC (subject to change):
https://www.osc.ca/en/industry/registration-and-compliance/registered-crypto-asset-trading-platforms
List of non-registered entities that appear to have dealt with Ontario residents:
https://www.osc.ca/en/investors/investor-warnings-and-alerts
If you believe you are a victim contact your local police service and the Canadian Anti-Fraud Centre (CAFC) online at https://www.antifraudcentre-centreantifraude.ca/report-signalez-eng.html or call toll free 1-888-495-8501
