New investor is targeted on social media

At OBSI, we have seen a significant increase in complaints related to cryptocurrency and fraud. The case example below was originally published in our Consumer Bulletin: Cryptocurrency scams increasingly targeting and exploiting Canadians.

Scammer poses as cryptocurrency broker

Mr. U was young and had limited investing experience. While on social media, a woman approached him and introduced herself as a cryptocurrency broker. She said that she could help him invest in cryptocurrency and promised quick profits. She advised Mr. U to purchase bitcoin so he could start investing on a cryptocurrency trading platform she knew about.

Over a two-week period, Mr. U sent e-transfers worth $7,000 from his bank account to a legitimate cryptocurrency dealer. Once the dealer delivered his bitcoins, he transferred them to the broker with the understanding that she would invest the funds using the platform she told him about and trade on his behalf. Mr. U thought that if he could earn some investment income it would help to ease his financial hardships. 

Soon afterwards, the broker sent Mr. U screenshots from the trading platform to indicate that the value of his crypto investments had soared. He immediately requested the option to cash out and told her to transfer his money back to him. She advised Mr. U to lock his investment in for longer because his profits were increasing. When he insisted that she return his money, she agreed to release the funds and told him that he should see them in his bank account soon. After he had waited a few hours and had not received the money, Mr. U realized that he had been scammed. Mr. U was not able to recover any of his money.

(2022)