Montréal – The Canadian Securities Administrators (CSA) warns the public about investment schemes involving fraudulent websites that solicit investments in foreign exchange (often referred to as “forex”), binary options and/or crypto assets.
In particular, fraudsters continue to capitalize on market interest in crypto assets to lure investors into scams, using high-pressure sales tactics and promises of high returns with little or no risk.
Investors have reported being directed to a crypto asset trading platform to convert their funds to crypto assets. Once purchased, investors are then encouraged to transfer the crypto assets to a fraudulent, third-party investment website to fund an “account”. In some cases, they are instructed by the fraudsters to download software that enables remote access to their computer for supposed assistance purchasing crypto assets and transferring funds.
The CSA and the Investment Industry Regulatory Organization of Canada (IIROC) have also noted increasing concerns over imposter sites that closely resemble registered firms, regulators and fake endorsements by individuals.
These scams are often promoted through email, texts, websites and social networks. Fraudsters target investors hoping to get in “on the ground floor” with crypto assets and exploit their fear of missing out on the opportunity of a lifetime. Investors may be misled by the convincing sales pitch and the professional appearance of the fraudulent websites.
Investments on fraudulent websites will appear to gain value quickly through manipulated statements. Fraudsters will strongly encourage investors to deposit additional funds using the illusion of rapid gains. Some websites will let investors withdraw a portion of their money to build trust and entice victims to invest more, but any request to withdraw all assets will fail. Ultimately, fraudsters will no longer respond to communication requests from investors.
Investors are encouraged to check the CSA’s Investor Alerts page for a list of firms and individuals to avoid.
Anyone selling investments or providing investment advice in Canada, including platforms that facilitate the trading of crypto assets, must comply with applicable securities or derivatives legislation. Investors should always check the registration of any person or business trying to sell them an investment or give them investment advice. To do this, investors can visit AreTheyRegistered.ca
The CSA encourages investors to:
The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.
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For investor inquiries, please contact your local securities regulator.