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$5.6 million dollars lost in cryptocurrency investment scams

For Immediate Release: 28-Sep-2022 @ 12:49 PM
MRU #: 22R089  

The Edmonton Police Service (EPS) is warning citizens to be mindful when investing in cryptocurrency after scammers defrauded local investors of millions of dollars.

Between the fall of 2019 and the end of 2021, the EPS Cybercrimes Unit received multiple reports of frauds following an investment in cryptocurrency. In most of the incidents, citizens were convinced to invest money in cryptocurrency via a seemingly legitimate website or mobile application. Scammers befriend complainants via social media, phone calls, online advertisements and online dating platforms and encourage them to make a small investment. The websites and applications are often controlled by the suspects who manipulate the investment numbers to make it look like investors (complainants) are making significant gains. This subsequently tricks complainants into investing even more money. Shortly after they invest a larger sum, the website or mobile application disappears or becomes inactive, and their funds are gone.

Throughout this time period, the EPS received 112 cryptocurrency fraud reports with complainants losing on average $50,000 or less to the scam. In total, more than $5.6 million was lost, with the highest loss equaling more than $1 million dollars. More than 90% of these occurrences referenced the use of bitcoin. Investigators continue to follow similar trends this year, though official data is not yet available.

“Sadly, we encountered several complainants who lost their life savings to this scam,” says Det. Dana Gehring with the EPS Cyber Crime Investigations Unit.

“Unfortunately, once funds are invested or sent to another party using cryptocurrency, there is little we can do to retrieve them. While we always aim to apprehend those responsible, our best tool with this type of fraud is to educate on prevention.”

If citizens are interested in online cryptocurrency investing, the EPS recommends being mindful of where and with whom you are investing:

  • Be wary of anyone you do not know who suddenly approaches you with an invitation to invest, particularly if it involves downloading an application.
  • Confirm that an application or website is legitimate before investing. Take steps to see if the organization actually exists and ensure any financial documents or disclosure they have posted match the application or website’s proposed financial activity.
  • Verify that the investment company/investor is registered with FINTRAC or the Canadian Securities Administrator.  If you discover the person or company is not registered, or is offering something they don’t seem permitted to, citizens are encouraged to contact their local securities regulator.
  • Legitimate Money Service Businesses (MSBs) can sometimes be used to facilitate transfers to scammers.Be very wary when someone asks you to purchase cryptocurrency using a legitimate MSB, and then transfer those funds to another cryptocurrency address.
  • Do not provide personal information to someone you do not know or whose identity you cannot verify.
  • Watch out for apps or websites that have limited functionality, misspelled words, poor grammar or do not operate as you expect them to. These may be fraudulent.

Anyone who has been defrauded in a similar way is encouraged to contact the EPS at 780-423-4567 or #377 from a mobile phone. Anonymous information can also be submitted to Crime Stoppers at 1-800-222-8477 or online at www.p3tips.com/250.

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For media inquiries please contact the EPS Media Relations Unit at
780-421-3551.

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