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What's a cryptocurrency scam?
There are many different cryptocurrencies, including some well-known ones, such as Bitcoin and Ethereum, and also new ones that are constantly being created. Fraudsters use a variety of scams to target you into purchasing and sending cryptocurrency as a form of payment or as an investment opportunity.
Common cryptocurrency scams
A seemingly credible person or business demands a payment with cryptocurrency. They may claim they don't accept any traditional forms of payment, such as credit and debit card payments. Fraudsters demand cryptocurrency as a form of payment because the funds become hard to trace.
Fraudsters try to lure you in with fake cryptocurrency investment opportunities. The fraudster says this is a once-in-a-lifetime prospect, limited time deal, a guaranteed high return or no risk opportunity. The fraudster will make you believe your investment is doing well, but you'll never receive your money back.
Fraudsters use phishing to get your digital wallet private key and steal your cryptocurrencies. They send mass emails in hopes that you click on the attached link and share your personal and banking details.
How paying with cryptocurrency differs from traditional methods
- Cryptocurrency is stored in a digital wallet that’s located online, on a computer or an external hard drive. These accounts aren't insured by the government, which makes it hard to recover your money if anything happens, such as having your digital wallet stolen or compromised, or sending cryptocurrency to a scammer.
- Sending cryptocurrency doesn't require an intermediary, such as a bank. It can provide anonymity for the receiver, which makes it difficult to trace the transaction and get your money back.
- The value of cryptocurrency is constantly changing, so there’s no guarantee of its worth.
Warning signs of cryptocurrency scams
- Promises of free money
- Vague details about where your investment funds are going
- Someone you don't know shares a cryptocurrency investment opportunity that's too good to be true
- You're advised that a cryptocurrency investment would have no risk and a guaranteed high return
- A celebrity or social media influencer promotes a cryptocurrency investment opportunity
- Misspelled words and grammatical errors in any communication you receive, such as an unsolicited email or social media post
Stay safe with our tips
- If you’re told to pay with cryptocurrency, it’s most likely a scam. Credible institutions won't force you to pay with cryptocurrency.
- Don’t click on any links or attachments from suspicious emails, text messages or social media.
- Don’t feel pressured to invest quickly. Take your time to understand where your money is going.
- If you have cryptocurrency stored in a digital wallet, protect the private key and don’t give it out to anyone.
Explore more about cryptocurrency scams
Canadian Anti-Fraud Centre Opens in a new window.
Report fraud when it happens and track the latest data on fraud happening in Canada.
The Little Black Book of Scams Opens in a new window.
Download the Canadian Competition Bureau's guide to scams in 8 different languages.
Canadian Centre for Cyber Security Opens in a new window.
Find the latest cyber security alerts and advisories and learn to protect your digital assets.