Recently, we have fielded questions from teens about investing in cryptocurrency. In the fast-paced world of digital finance, cryptocurrencies have captured the attention of both parents and curious teenagers looking to dip their toes into the investment market. However, amidst the allure of potential profits lies a lurking danger – cryptocurrency scams and fraud. (1) These schemes aim to deceive unsuspecting individuals, often leaving them not only financially depleted but also vulnerable to identity theft and other cybercrimes. According to Canada’s Anti-Fraud Centre, cryptocurrency fraud was estimated at more than $300 million in Canada in 2023. (2) In 2022 British Columbians were scammed out of 24 million in crypto-fraud schemes (3), and in 2023 22.5 million was scammed by residents in Alberta. (4). In one municipality in British Columbia, a police department reported that in 2023 they investigated fraudulent cryptocurrency cases that totaled over 2 million dollars, of which only $155,000 was recovered. The reality is that if you lose your money to a cryptocurrency scam/fraud, there is a very strong likelihood that you will never see your money again.
Cryptocurrency scams come in various forms, but one prevalent tactic involves fraudsters enticing victims with promises of high returns on investments in a short period. These scammers prey on the desire for quick wealth, exploiting the lack of regulation in the cryptocurrency market to lure in their targets. Once the victim invests their money, they may never see it again, and in some cases, they may also unwittingly surrender personal and financial information, opening themselves up to further exploitation.
For teenagers eager to explore the world of cryptocurrencies and parents concerned about their children falling victim to scams, it’s crucial to exercise caution and follow some essential guidelines:
- Scammers will push hard for their target to act quickly to maximize profit. Take your time and do your research first. Also, be very skeptical if the scammer cautions you not to discuss your investment with others.
- When buying or trading cryptocurrencies, opt for well-known and established exchanges. These platforms have robust security measures in place to protect users’ funds and information. Research the exchange thoroughly before creating an account and never trust unverified or obscure platforms promising unrealistic returns. The Canadian Securities Administration have a great online resource to check to see if the person who has connected with you is a registered securities professional in Canada (5)
- Some scammers will use the names of legitimate companies to lend credibility to the fraud and convince victims to send money. Verify email addresses, URLs, phone numbers, and their physical address.
- Hardware wallets provide an extra layer of security by storing your cryptocurrency offline, making them inaccessible to hackers. If you decide to invest a significant amount in cryptocurrencies, consider purchasing a hardware wallet directly from the manufacturer to ensure its authenticity and integrity.
- Knowledge is your best defense against scams. Take the time to learn about different types of cryptocurrency scams and how to recognize them. Stay informed about the latest developments in the cryptocurrency space, including regulatory updates and security best practices.
- Be wary of any investment opportunity that sounds too good to be true. Avoid falling for promises of guaranteed returns or get-rich-quick schemes. Remember that legitimate investments carry inherent risks, and there are no shortcuts to wealth.
- Never share sensitive information, such as your wallet addresses or private keys, with anyone online. Beware of phishing attempts disguised as legitimate cryptocurrency services or communications from government agencies. No reputable organization will ever request payment in the form of cryptocurrencies.
- If you’re unsure about an investment opportunity or suspect fraudulent activity, don’t hesitate to seek guidance from trusted adults, financial advisors, or online communities dedicated to cryptocurrency safety.
- Cryptocurrencies operate independently of a central bank and are currently unregulated in Canada. If you fall victim to a cryptocurrency fraud money lost is rarely recouped.
It’s essential to recognize that while cryptocurrencies offer exciting opportunities for investment and innovation, they also present unique risks, particularly in an unregulated environment. By staying vigilant, informed, and cautious, both teenagers and parents can navigate the world of cryptocurrencies safely and protect themselves from falling victim to scams and fraud.
Remember, the key to safeguarding your investments and personal information lies in proactive measures and prudent decision-making. Stay vigilant, stay informed, and together, we can mitigate the risks associated with cryptocurrency investments.
Having said all this, our recommendation – STAY AWAY from any kind of cryptocurrency investments, even if proven legit, they are just too volatile.
Digital Food For Thought
The White Hatter
1/ https://antifraudcentre-centreantifraude.ca/scams-fraudes/investment-investissement-eng.htm#a0
2/ https://antifraudcentre-centreantifraude.ca/index-eng.htm
3/ https://globalnews.ca/news/9570657/b-c-cryptocurrency-investment-nft-scams-2022/
4/ https://www.cbc.ca/news/canada/calgary/calgary-cryptocurrency-scams-police-1.6998789
5/ https://www.securities-administrators.ca/registration/are-they-registered/
