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Cryptocurrency exchange flagged as offshore investment scam

Winnipeg (July 24, 2020) – The Manitoba Securities Commission (MSC) issued an investor alert against the cryptocurrency exchange CrypTrade24. The bitcoin firm, which offers investment plans in cryptocurrency trading, claims to have its headquarter in Churchill, Manitoba, whilst being registered in the Netherlands. MSC staff discovered that the platform is neither registered to trade in securities in Manitoba nor in the Netherlands and the Manitoban HQ address is also a scam. The commission is warning of the red flags for investment fraud on the firm’s website and urges investors to check registrations before doing business.

The Manitoba Securities Commission (MSC) flagged the cryptocurrency trading platform, CrypTrade24, as an offshore investment scam, according to a press release. In the investor alert, the commission clarified that CrypTrade24 is not registered to trade in securities in Manitoba, nor in British Columbia.

An offshore investment scam with alleged Canadian headquarter

During an investigation, the MSC discovered that CrypTrade24 provided false statements on their website about their location and registration. The bitcoin exchange, which offers investment plans in cryptocurrency trading, is claiming it is operating from Churchill, Manitoba. The website also reads that they ‘collected the best from the business of investment under a single virtual roof.’

The commission revealed that the listed address in Manitoba is a two-bedroom bungalow owned by Manitoba Housing. Upon request, Manitoba Housing confirmed that the small home in Churchill is currently unoccupied and that no company is operating from that address. The provincial agency uses the property occasionally for government staff traveling to Churchill for work.

‘I’ve seen many offshore trading firms use fictitious addresses, including a Winnipeg parking lot’

As a result of the investigation, the MSC issued an investor alert on CrypTrade24 and cryptrade24.com. Besides the fake Churchill HQ address, CrypTrade24 is also not registered to trade in securities in Manitoba, according to the commission. On its website, the platform is claiming to be legally registered in the Netherlands. However, the staff of the Dutch Authority for the Financial Markets (AFM) have confirmed the company is not registered in the Netherlands either.

The commission does not have any indication of victims at this point, but is preventatively warning investors ‘I’ve seen many offshore trading firms use fictitious addresses, including a Winnipeg parking lot,’ said Jason Roy, Senior Investigator with the MSC, ‘Investors cannot rely on the look of a website to determine if it is legitimate, and they can’t rely on the how nice the person on the other end of the phone is. Investors need to make sure the person they are dealing with is registered to sell investments in Manitoba. It is the number one way to protect against investment fraud.’

The British Columbia Securities Commission (BCSC) has already issued an investor alert against CrypTrade24 on June 17 of this year.

Red flags of investment fraud

Multiple red flags of investment fraud can be found on the CrypTrade24 website such as promises of up to 200 percent return on investment (ROI) within 20 days. ‘A 200% ROI in 20 days is a major red flag for fraud,’ warned Roy.

In addition to promises of high returns with low risk and unregistered salespeople or companies, the MSC also listed pressure to invest quickly, exclusive offers, offers from strangers, and inconsistent details as well as no paper trail as red flags of fraud.

Investors are urged to check if the individual or company is registered to do business in their province and to practice due diligence, meaning, research the company thoroughly and talk to their registered investment advisor to ensure it is an appropriate decision.

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