A cybercrimes investigator with the Winnipeg Police Service says the number of Bitcoin and cryptocurrency scams have spiked in recent years and warns Winnipeggers to be wary.
Bitcoin is a type of cryptocurrency – essentially a digital currency that can be purchased, traded and used to buy items depending on the retailer.
READ MORE: What Canadians need to know before buying cryptocurrency
Sgt. Trevor Thompson, with the Winnipeg police financial crime unit and cybercrime investigation team, said while money can be made with cryptocurrency, Winnipeggers need to be careful and know what they are doing – as they would with any other type of investment.
The Winnipeg police cybercrime investigation team says it has seen an uptick in cryptocurrency scams, which promise huge returns on investment within days but have left victims suffering significant financial losses.
“Be very wary of anybody that’s promising excessive returns, anybody or any platform where you’re seeing video testimonials of people that say, for example, ‘I invested $1,000 and four days later, I had $30,000.’ Be very skeptical of that,” Thompson said.
Police said in two recent investigations into these scams, the funds which totalled a combined $35,000 in Canadian dollars were recovered and returned to the victims. However, Thompson said it doesn’t always end this way as cryptocurrency can be difficult to track and often impossible to recover.
He said in many cases the website may seem reputable. It is only when a person attempts to withdraw their money that they discover they have fallen victim to a scam.
“Typically, most times what happens is the funds don’t go where they’re supposed to go. They go into a crypto wallet held by a foreign actor or a criminal actor that just essentially takes the money,” he said.
Thompson said these types of scams are becoming more common.
“I’ll tell you in the last two years, it’s probably increased tenfold,” he said. “I’d be shocked every week if I don’t see five or six in various ways, shapes or forms, depending on the type of the scam.”
He said police are seeing an increase in people’s social media accounts being hacked and used to send messages to friends attempting to convince them to make an investment in some sort of crypto asset.
He said Winnipeggers need to be on the watch for these types of scams. He said people should do their research before deciding to invest in Bitcoin or any other type of cryptocurrency. He suggests speaking with a financial advisor before making any investments.
The Canadian Anti-Fraud Centre has more information about cryptocurrency scams and how to report them on its website.