B.C. investors lost $24M to crypto scams last year: financial regulator

FILE PHOTO - An advertisement of Bitcoin, one of the cryptocurrencies, is displayed on a building in Hong Kong, on Nov. 18, 2021. Bitcoin and other cryptocurrencies were collapsing in price Monday, June, 13, 2022 after the major crypto lender Celsius halted all withdrawals citing 'extreme market conditions.' It is the second collapse of a part of the crypto world in the last two months. (AP Photo/Kin Cheung, File)

British Columbians lost a combined $24 million to cryptocurrency scams in 2022, an amount the province's financial regulator says is nearly triple what was recorded in 2021.

This figure likely only represents a fraction of actual losses, which the B.C. Securities Commission says are only reported to authorities in between five and 10 per cent of cases.

The financial regulator released the information Wednesday, launching an awareness campaign meant to help people better identify and avoid potential investment fraud.

“Investing in crypto is risky, and one of the biggest risks is outright fraud," the BCSC's director of enforcement Doug Muir says in a statement.  

One way to reduce risk, according to the regulator, is to check whether a crypto exchange is registered with Canadian securities regulators before using it to buy and sell.

Additional tips include being wary of unsolicited offers, promises of a guaranteed return and pressure to invest immediately. Investment pitches that contain "complicated jargon and language that is difficult to understand" should also be approached with extreme caution.

"Scammers are using the popularity and complexity of crypto assets to target vulnerable investors, particularly on social media," the statement from the BCSC says, adding that young adults seem to be particularly vulnerable to these scams because they are more likely to seek out and heed online advice.

The BCSC has produced an online video outlining how would-be investors can spot red flags.