Peterborough police are warning the public of an increase in cryptocurrency scams, after reporting more than $550,000 in local victim losses from cryptocurrency fraud last year.
Cryptocurrency is a digital currency designed to work as a medium of exchange through a computer network. It is not reliant on any central authority, such as a government or bank, to uphold or maintain it.
According to police, while cryptocurrency frauds come in various forms, investment-related scams are becoming increasingly common.
These frauds typically begin with an advertisement on social media that claim a public figure or celebrity is promoting a cryptocurrency trading platform. The victim is directed to an official-looking website where they are asked to provide their contact information.
A representative of the so-called company then contacts the victim and walks them through the process of setting up an account and adding funds to the account in Bitcoin or another cryptocurrency.
The company then shows the victim that their trading account appears to be doing very well and encourages the victim to transfer even more cryptocurrency into the account. When the victim attempts to withdraw their funds, they are locked out of the account and the company stops communicating with them.
Unlike frauds involving bank transfers, cryptocurrency frauds are extremely difficult to trace to determine who has the victim’s funds.
Police are advising the public to be cautious when dealing with cryptocurrency:
- If something appears too good to be true it probably is
- Be wary of investment advice from an unknown online company
- Be mindful that anything you see online can be faked.
Peterborough residents who want to find out more about fraud or file a fraud report can visit peterboroughpolice.com/fraud.