The Hawkesbury Detachment of the Ontario Provincial Police (OPP) it warning area residents that there has been a steady increase in reports of scams related to investing in cryptocurrency.
The scams involve fraudsters setting up a fake cryptocurrency investment company. These companies usually have a very convincing online presence, with a professional-looking website, social media accounts and reviews and testimonials by “satisfied customers”. Once the scammers lure potential victims, they will use high-pressure sales tactics to convince the victims to invest ever-increasing amounts of money.
Here are some tips to avoid falling victim to cryptocurrency investment fraud:
- Be suspicious of any investment that promises abnormally high returns in a short amount of time
- Do your research: search online for scam complaints related to the company, and don’t limit yourself to just Canada – many of these companies operate internationally.
- Search the business registration authority in whatever country the company claims to be located in to ensure that it is actually a properly registered business.
- If they claim to be associated with a legitimate company, such as a well-known investment firm or cryptocurrency exchange, contact this company to see if that relationship actually exists.
- Never share the private keys for your cryptocurrency addresses or the recovery seed phrases for your cryptocurrency wallets with anyone.
- If you store these keys on an internet connected device keep it in a password protected folder or document.
- If you have an account with a cryptocurrency exchange, do not store your cryptocurrency long term in your exchange wallet. If the exchange is compromised through a hack, or a malicious employee, all those funds can be lost. Store your cryptocurrency in a separate address that only you control until you need to convert it to another cryptocurrency or fiat currency.