As cryptocurrencies become more widely accepted, crypto-related crimes are on the rise in Canada, despite its reputation as a largely crime-free country. The Bank of Canada’s recent report suggests that the frequency of scams may be putting some people off investing in digital assets.
Canadians have been victims of various crypto-related crimes, from large-scale investment scams to armed home invasions. Last year, victims of investment fraud in Canada lost a staggering $308.6 million, almost double the figure for 2021.
In April 2021, a Calgary man was the victim of a violent home invasion, during which two armed men forced him at gunpoint to reveal his cryptocurrency wallet’s private keys. They managed to steal around $11,000 worth of Ether. The thief, Buay Poutekchan Tung, was later fined $5,000 for the theft, but the perpetrators of the home invasion have yet to be charged.
In a separate incident in April 2022, an elderly person in Burnaby, British Columbia, was defrauded of over $7.5 million in a cryptocurrency scam. The fraudster used the method known as “pig butchering,” where they gain the victim’s trust over a long period of time before convincing them to invest their money in crypto through a fake trading app. The Royal Canadian Mounted Police (RCMP) have called it one of the largest personal frauds they have seen.
Financial regulators have issued warnings about crypto-related crimes. The B.C. Securities Commission, RCMP, and Canadian Anti-Fraud Centre report that British Columbians lost $24 million to crypto scams in 2022, and nationwide Canadians lost $530 million to various frauds and cybercrimes.
It appears that the number of crypto-related crimes has had a knock-on effect on digital asset ownership in Canada. According to a report from the Bank of Canada, Bitcoin ownership has dropped from 13% in 2021 to 9% in August 2022, and ownership of altcoins or other cryptos has also declined. This suggests people are leaving digital assets altogether.
However, according to Chainalysis’s mid-year crime report, crypto-related crime has seen a sharp decline so far this year. Canada has a middling rate of crypto adoption compared to other nations, and Chainalysis’s 2022 Crypto Adoption Index ranked Canada 22nd in the world.
With the number of high-profile crypto-related crimes increasing, Canadians should be extra cautious when investing in digital assets. More than one-third of Canadian crypto traders have fallen victim to a scam, and financial authorities advise people to always question the source and legitimacy of financial advice. If you are worried about scams involving cryptocurrency, please read our helpful guide on the most common cryptocurrency scams.
