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Canadians warned of new Bitcoin scam

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KelownaNowMegan Trudeau | Jan 7, 2018

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Thinking of investing in Bitcoin? You may want to tread carefully, as people are now being warned about a new scam that targets Bitcoin purchasers, and Canadian consumers are being asked to be especially cautious.

More and more people seem to be considering Bitcoin as an investment opportunity, and con artists are looking to take advantage. A scam tracking company, BBB Scam Tracker, reports receiving numerous complaints from consumers who have been fooled by phony Bitcoin investments, resulting in the loss of thousands of dollars.

The tracking company has received complaints about apps that allow Canadian customers to purchase Bitcoin, but they do not support selling it. As one consumer put it: "Basically, they tell you to buy Bitcoins with their app knowing you're in Canada but once you put your money in, they don't allow you to take it out."

See: SEC charges alleged cryptocurrency scam with fraudulently raising $15 million

The scam works through a legitimate looking website that offers to mine the cryptocurrency for a fee (Bitcoin is created by mining, using special software to solve complex math equations). The website asks you to pay upfront, and Bitcoin will be transferred to your account. However, after you make the payment, nothing happens.

Other versions of this scam target investors trying to convert Bitcoin to their local currency. For example, one consumer used a service to exchange Bitcoin for US dollars and transfer the money into a PayPal account. However, the transaction didn't work as planned.

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ncfa logo 600 - Canadians warned of new Bitcoin scamThe National Crowdfunding Association of Canada (NCFA Canada) is a national non-profit actively engaged with social and investment crowdfunding, alternative finance, fintech, peer-to-peer (P2P), initial coin offerings (ICO), and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, networking opportunities and services to thousands of community members and works closely with industry, government, academia and eco-system partners and affiliates to create a vibrant and innovative fintech and online financing industry in Canada.  For more information, please visit: ncfacanada.org

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