The Manitoba Securities Commission (MSC) in Canada has sounded an alarm over the proliferation of fake cryptocurrency investment sites.
According to MSC Senior Researcher Jason Roy, the agency has received over 60 complaints from Manitoba residents who lost between $320 to $206,000 while investing in digital assets, with total losses amounting to $710,000.
MSC spokesperson Ainsley Cunningham acknowledges that legitimate cryptocurrency firms exist and offer promising investment opportunities. However, fraudsters tend to create fake sites and pose as these firms.
Many of these scammers operate from outside Canada but claim to have Canadian offices. They use social media to target potential victims, posting false news or claiming that their proposal has been endorsed by celebrities.
Typically, the scammers first encourage investors to deposit a small sum of around $350 in cryptocurrencies. When investors see profits accumulating in their personal accounts on the fake platform, they invest more money.
But when users try to withdraw their funds, the criminals either ignore withdrawal requests or insist on more deposits to unlock the funds. Canadian regulators are tightening the screws on the crypto industry.
In February, the Canadian Securities Administrators Association (CSA) banned trading in algorithmic stablecoins and imposed new rules for virtual asset service providers (VASPs).