Third Canadian HODLer lost money to crypto scams (study)

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Research by contributors from Toronto Metropolitan University (TMU) estimated that 35% of Canadians with digital assets had been victims of crypto fraud.

The study further determined that around 9% of locals have purchased cryptocurrencies or NFTs, with the share higher among university graduates.

Less educated people seem more likely to get scammed

The report, conducted via a representative survey of 2,000 Canadian residents, showed that fraudulent cryptocurrency schemes are a serious problem in the country. According to the results, more than a third of those who invested in digital assets were lured into some sort of scam.

14% (the largest share) said they had been contacted by someone who posed as a crypto investment manager and then stole fees for their “services.” 10% admitted to sharing their wallet information following a request for additional information, while 7% bought digital currencies from a mysterious individual who later disappeared.

“When users fall prey to these cryptocurrency scams, significant financial loss can result, sometimes compromising large sums of money from lines of credit, credit cards, and savings. Not only are there financial losses, but also the risk of theft of personal and financial information. The scale of these types of frauds and scams appears to be considerable in Canada,” the research authors warned.

People in lower income brackets and those with less education are more likely to get scammed. People earning more than $50,000 a year and with a college degree seem more aware of industry risks and are more cautious when approached by scammers.

The survey also found that most Canadians are wary of cryptocurrency exchanges. Nearly 50% have “low trust” in these companies, 25% are “neutral”, while only 9% have “high trust”.

In comparison, trust in local banks is much higher. Only 12% do not believe in national banking institutions, while 46% have “great confidence”.

Canadians’ confidence in crypto exchanges, Source: DAIS

The study suggests that roughly one in 10 Canadians have jumped on the crypto bandwagon by buying bitcoin, ether, or another digital asset. The majority of investors are men between the ages of 25 and 35.

The painful lesson learned by a Canadian couple

While some scams are not so devastating and mainly lead to frustration in the victims, others could be crucial. For example, an elderly man and his wife from Toronto shared $300,000 in such a scheme.

The couple wanted to invest their savings and were approached by a stranger online. After presenting themselves as “professionals and knowledgeable” in the field of investing, they advised the family to distribute funds on a dodgy cryptocurrency platform.

At first, everything seemed legit, and the duo saw their investment grow “significantly” over time. However, the problems started when they asked to remove some assets. The malefactor said he had to pay considerable fees to carry out such transactions. Later, the couple saw that their entire investment was gone, proving their fears that they had fallen victim to crypto fraud.

Luckily for them, the Toronto Police Service recovered a “significant portion of the lost funds”. The identity of the criminal who drained the money is unclear, however, meaning he could be located in another country.

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