Last year was an interesting one for cryptocurrency in Canada and around the world.
A downturned market spurred potential consolidation while financial scandals prompted the Canadian Securities Administrators to warn investors that trading in crypto assets comes “with elevated levels of risk that may not be suitable for many investors, in particular retail investors.”
The CSA has noted that, generally speaking, “trading crypto assets is a speculative activity, and the value and liquidity of crypto assets are highly volatile.”
“Recent insolvencies involving several crypto asset trading platforms highlight the tremendous risks associated with trading crypto assets, particularly when conducted on unregistered platforms based outside of Canada,” Stan Magidson, CSA Chair and CEO of the Alberta Securities Commission, stated in February.
Those familiar with crypto are aware that the industry, while ripe with energy and innovation, is also rife with grifters and scams.
The British Columbia Securities Commission has thus launched an online campaign to combat crypto scams by educating potential traders and investors on the threats of the market.
The Commission’s campaign targets an array of scam types, from Ponzi schemes to Pump-and-Dumps.
The campaign’s splash page also lists several “red flags” to look for when scouting crypt-opportunities.
For example, the BCSC warns that guarantees, such as “guaranteed to get rich quick” promises, are “almost guaranteed to be a scam.” (Their pun—and yes, intentional.)
Another ready flag is “When they’re being vague or can’t answer your questions.” And tread with caution when working with a crypto dealer who exudes “a sense of urgency,” the campaign warns—that’s a clever marketing attempt to create FOMO for a possible pump-and-dump or similar scam.
Other red flags include the obvious—anyone asking for login details or your crypto keys is certainly nefarious—and the more nuanced, such as spotting typographical errors and misspellings.
“If it’s too good to be true,” the Commission concludes, then it probably is.