One in Three Canadian Cryptocurrency Holders Experienced Financial Losses Due to Scams, According to Research

Research conducted by contributors from Toronto Metropolitan University (TMU) estimated that 35% of Canadians who own digital assets have been victims of crypto fraud.

The study also found that around 9% of the population has bought cryptocurrencies or NFTs, with a higher percentage among those who have completed university education.

Individuals with Less Education Appear More Prone to Scams

The report, based on a representative survey of 2,000 Canadian residents, indicated that fraudulent activities related to cryptocurrencies pose a significant issue in the country. According to the findings, more than a third of those who have invested in digital assets have been drawn into some form of scam.

14% (the largest proportion) reported being approached by someone claiming to be a crypto investment manager, who subsequently took a fee for their “services.” 10% confessed to sharing their wallet details after being asked for further information, while 7% purchased digital currencies from an unidentified individual who then vanished.

“When users fall victim to these cryptocurrency scams, substantial financial losses can occur, sometimes jeopardizing significant amounts of money from credit lines, credit cards, and life savings. In addition to financial losses, there is also the risk of personal and financial information being compromised. The extent of these frauds and scams appears considerable in Canada,” the authors of the research cautioned.

Individuals from lower income levels and those with less education are more susceptible to being scammed. People earning over $50,000 annually and holding university degrees seem to be more aware of the risks in the sector and exercise greater caution when approached by scammers.

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The survey further indicated that a majority of Canadians are skeptical about cryptocurrency exchanges. Nearly 50% express “low trust” in such entities, 25% are “neutral,” while only 9% have “high trust.”

In contrast, confidence in local banks is significantly higher. Only 12% lack faith in domestic banking institutions, while 46% have “high trust.”

Canadians’ Trust in Crypto Exchanges, Source: DAIS

The study suggested that approximately one in ten Canadians have joined the crypto movement by purchasing bitcoin, ether, or another digital asset. The majority of investors are men aged between 25 and 35.

A Difficult Lesson for a Canadian Couple

While some scams may not be severely damaging and primarily lead to frustration among victims, others can be critical. One instance involves an elderly couple from Toronto who lost $300,000 in such a scheme.

The couple aimed to invest their life savings and were contacted by an unknown individual online. After presenting themselves as “professional and knowledgeable” in the investment sector, they advised the couple to allocate funds on a questionable cryptocurrency platform.

Initially, everything appeared legitimate, and the couple observed their investment growing “significantly” over time. However, issues arose when they attempted to withdraw some assets. The scammer claimed they needed to pay substantial fees to finalize such transactions. Eventually, the couple discovered that their entire investment had disappeared, confirming their fears that they had been victims of crypto fraud.

Fortunately, the Toronto Police Service managed to recover a “significant portion of lost funds.” However, the identity of the perpetrator who took the money remains unknown, suggesting they could be located in another country.

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