Introduction

The cryptocurrency investment landscape is new and exciting, with many possibilities for high returns. Unfortunately, it has also attracted a variety of fraud, scams and dubious investment platforms.

The cryptocurrency industry attracts more fraud and scam attempts than other areas in finance because of the irreversible nature of cryptocurrency transactions, the novelty of the space, and general lack of public awareness.

Below is a catalogue of common schemes used to target cryptocurrency investors, and some general principles for avoiding them.

Most importantly, you should know that Coinsquare is not partnered with any other investing platforms, employment sites or rental platforms. Anyone who is asking you to send money to Coinsquare to facilitate a job, rental or investing transaction is trying to scam you.

Investment Scams

The most common scam is where a person or group pretends to be an investment advisor or trader. They will often promise oversized or guaranteed returns, use slick marketing pages, or aggressive sales tactics to lure you into sending them money via e-Transfer or cryptocurrency. Once you send the deposit, they often disappear.

To avoid this scam, always use your discretion and ask plenty of questions before investing with anyone. Some red flags include a promise of guaranteed returns, promises of risk-free investing, high-pressure, or contact via “unprofessional” contact methods like social media, Telegram or WhatsApp.

Job & Rental Scams

This is a type of fraud where someone pretends to be offering a job or a rental housing, and demands payment in cryptocurrency. They often will lure victims into providing personal information, including name, date of birth, and photos of ID documents, as part of the scam. The scammer then uses this info to open a cryptocurrency exchange account, which they demand payment for the fake job/property for. Once the deposit is made, the scammer converts the funds to Bitcoin, withdraws it and disappears.

To avoid this scam, never provide your personal info to anyone you don't trust. It's also recommended to work with a legal professional before signing any property or employment contract, and only to use Canadian Dollar transfers (i.e. wires or money orders) instead of cryptocurrencies for rental or mortgage deposits.

Imposter Scams

This is a type of scam where someone poses as a public figure or investing platform using a fake domain URL or social media profile. They then lure victims to believe that they are the reputable company, often using very similar websites and marketing pages.

Often, this will be linked with a giveaway scam, where the imposter claims to be able to return multiples of any deposit paid to them in cryptocurrency. Obviously, once the imposter receives the deposits, they do not return anything, but in some cases they may post publicly names of “contest winners” in order to lure other investors into sending money to the scam.

To avoid this scam, always ensure the person you are communicating with is an official representative of their organization. You can find Coinsquare's official website domains and social media accounts here.

Resources

Before signing up with any investing platform or investment management company, we strongly recommend that you review the Ontario Securities Commission's (OSC) "Investor Warnings and Alerts" page. The OSC publishes a list of platforms who are not registered to operate in the investment business, as a warning to investors.

Additionally, Coinsquare keeps an internal list of individuals and firms that have targeted clients on our platform, or attempted to lure individuals using fraudulent Coinsquare branding. If you have any questions or concerns about a 3rd party platform, we encourage you to contact our Support team right away, so that we can help you check our list of identified scams and advise of any OSC warnings in place.

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