Canadian Anti-Fraud Center Bulletin: Using Cryptocurrency Safely

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As the value of cryptocurrencies reaches new heights, the Canadian Anti-Fraud Center (CAFC) would like to remind Canadians to recognize that fraudsters are also looking to take advantage of the growing interest in the cryptocurrency markets. Data breaches, thefts, exit scams and fraud related to initial coin offerings have all been documented in 2020.

Here are some general guidelines and best practices for rejecting fraud and protecting your virtual assets.

How to Protect Yourself Be careful when sending cryptocurrency. Once the transaction is completed, it is unlikely to be rolled back. As anti-money laundering and proceeds of crime regimes around the world create regulatory frameworks that treat businesses that treat crypto currencies like money-service businesses, Canadians need to do their research to find out. ensure they use trustworthy and compliant services. Hold your cryptocurrency with well-known and reputable exchanges, and buy all hardware wallets direct from the manufacturer. Find out the differences between cold wallets and hot wallets. Cold wallets are not connected to the internet, and hot wallets are connected to the internet. On the one hand, you are in control of your virtual assets while on the other hand, you can expose your cryptocurrency to the risk of theft and / or rely on a third-party exchange to manage your virtual assets. Use strong and unique passwords for different online accounts. In the event of a data breach, fraudsters can try to use credential stuffing tactics to gain access to your cryptocurrency wallet. Consider using multi-factor authentication to secure your accounts and / or authorize transactions. This is an additional layer of security that helps reduce fraud. Beware of phishing emails, store your private keys securely, and NEVER share this information. If you lose these keys, you also risk losing your virtual assets. The same goes for all 12 or 24 word passphrases. Find out more tips and tricks to protect yourself against fraud.

If you believe that you or someone you know has been the victim of fraud, please contact the Canadian Anti-Fraud Center at 1-888-495-8501 or report online at www.antifraudcentre-centreantifraude.ca.

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