Date: Tuesday, January 28, 2025

Victoria, B.C. – VicPD is advising extra caution about cryptocurrency frauds following a joint initiative with several police agencies in B.C., and cryptocurrency stakeholders, identifying an estimated collective loss of approximately $35 million CAD.  

In recent years technological advances have empowered police to combat cryptocurrency frauds more effectively. On September 16 and 17, 2024, Victoria Police, alongside other police agencies in B.C. and representatives of cryptocurrency exchanges, participated in “Operation DeCloak,” a localized initiative of Operation Spincaster, aimed at disrupting cryptocurrency frauds. The workshop was hosted by the Delta Police Department and blockchain analytics company Chainalysis.  

The initiative identified more than 1,100 victims of cryptocurrency fraud worldwide, including potential Canadian victims. The investigation examined 240 crypto addresses, revealing an estimated collective loss of approximately $35 million CAD. 

In 2024, residents in Victoria and Esquimalt reported 46 cryptocurrency crimes. Investigators say most of the high-value cryptocurrency cases were related to investment frauds.  

VicPD is Advising Extra Caution When it Comes to Cryptocurrency Frauds 

“Cryptocurrency scams are using AI technology where a victim can interact with an AI chatbot who can provide misleading information or use fake celebrity endorsements,” says Sergeant Simon de Wit, supervisor of the Cyber Crime Unit. He adds that investment, extortion, employment, romance, and bank frauds are anticipated to reappear in 2025. 

Common Types of Frauds 

  • Investment Fraud – A victim is looking to invest funds and sees a social media advertisement, or searches for an investment company, or is recommended an investment company from an online acquaintance.  
    • The investment scammer will often have a fake website and promise a high rate of return. The victim will invest a small amount of funds and see on the website their investment has doubled or tripled and then be coerced to put in a larger amount of investment. Once the victim tries to withdraw the funds they are asked to pay tax on the investment, so they give the scammer even more funds, but they never get their returns out. 
  • Extortion/Blackmail Fraud – A victim receives an email targeting the victim who is threatened with blackmail. 
    • The extortion email has the victim’s full name, personal telephone number, residential address, and a screenshot from search engines of the street where they live. The fraudster claims to have personal videos of the victim “doing embarrassing things in their house and on their webcams” and threatens to send the videos to their contacts unless they pay immediately using Bitcoin or another form of cryptocurrency. 
  • Online Employment Scam – Victims will see a social media advertisement for a quick, work from home job to make easy funds on the side.  
    • The victim will be instructed to have an interview or meet the employer over a messaging app (WhatsApp or Telegram) where they will be promised to make several hundred dollars per day. Some scams will require the victim to pay up front for expenses related to the business, while some scams will ask the victim to use their own bank account to manage the funds.  
  • Romance Scam – A victim will meet someone online and become friends.  
    • The victim will often be groomed for weeks or months until trust and rapport is built. The scammer will then ask the victim for funds for a medical bill with the promise to pay them back, or sometimes the scammer will tell the victim about a lucrative investment opportunity and introduce the investment fraud to them. 
  • Bank Scam – The victim is contacted by someone who claims to represent the bank.  
    • The victim is advised that their bank account is being used for criminal activity or compromised and that they need to secure the funds. Victims are then directed to make deposits into crypto-wallets or crypto-ATMs, unaware that the suspects control these wallets. 

Keeping Crypto Safe 

To protect yourself from falling victim to these frauds, police recommend using caution when dealing with cryptocurrency and taking steps to secure it.  

  • Fully understand the risks associated with cryptocurrency before getting involved. 
  • Cryptocurrency is decentralized, so there is no government agency or bank for you to take a complaint or dispute with.  
  • If you are going to invest in cryptocurrency, consider storing your assets in a cold wallet (i.e. – not connected to the internet).  
  • Never share your cryptocurrency wallet logins, passkeys, or seed phrases with anyone and consider keeping that data separate from your computer.  
  • Never access your cryptocurrency account on a shared computer or on public Wi-Fi. 

If you plan on investing using cryptocurrency, research the platform you intend to use for your investment as some platforms are more mainstream and reliable than others, periodically withdraw portions of your investments to ensure access and that there are no hidden fees, diversify your investment by avoiding placing all your investments in one spot, and be ready for the possibility of losing everything. 

Legitimate businesses and government typically do not accept cryptocurrency.  

“If someone requests cryptocurrency, it should raise an immediate red flag indicating that something is wrong and that someone is attempting to defraud you. Once you have sent cryptocurrency out, there is no ability to cancel the payment or get those funds back,” adds Sergeant de Wit. 

If you have been a victim of cryptocurrency fraud report it to the police through the E-Comm Report Desk at (250) 995-7654, and to the Canadian Anti-Fraud Centre. 

Learn more by visiting vicpd.ca/fraud.

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