Manitoba
A fraud victim who invested more than $168,000 into a cryptocurrency scam last fall got most of it back — but that's an unusual outcome, Winnipeg police say.
Often impossible to recover funds lost in cryptocurrency scams, police say
A fraud victim who invested more than $168,000 into a cryptocurrency scam last fall got most of it back — but that's an unusual outcome, Winnipeg police say.
Police received a report in October 2022 that a person had lost 5.806 bitcoin, valued at the time at over $168,000, in a cryptocurrency investment scam, the Winnipeg Police Service said in a news release Wednesday.
The victim of the scam had been directed to purchase bitcoin over three months.
The Winnipeg police cyber investigation team discovered that, without the individual's knowledge, the invested bitcoin had then been transferred overseas and converted from bitcoin to tether, another type of cryptocurrency.
Police recovered $155,000 in crypto assets and returned them to the victim.
"Police utilize certain techniques to trace crypto assets as they are moved," Const. Dani McKinnon from the public information office said in an email on Wednesday.
"In some cases, the timely tracking of crypto assets can identify opportunities for law enforcement intervention."
Fraud prevention month
The news release, sent on the first day of fraud prevention month, said cryptocurrency investments are difficult to track, and it is often impossible to recover any funds lost in scams.
Cryptocurrency is a form of digital currency that's not issued or controlled by a central bank. Since cryptocurrency operates as a digital payment system that does not rely on financial institutions, like banks, for transactions, this makes transactions more difficult to trace.
While specific data about the movement of funds can be tracked, identifying the owners can be difficult, making the recovery of funds invested into a cryptocurrency scam more difficult.
The latest Canada Anti-Fraud Centre annual report says fraud associated with cybercrime is rapidly increasing, even among younger Canadians.
Between 2016 to 2020, cybercrimes, including cryptocurrency thefts, increased by 370 per cent, according to the province of Manitoba.
The Canadian Anti-Fraud Centre recommends that people always make sure they're investing with a reputable entity before making any financial transaction.
To prevent fraud, it is always recommended to verify the legitimacy of websites, companies or individuals, particularly when it comes to cryptocurrency transactions.
More from CBC Manitoba:
- 19-year-old Winnipeg man held at gunpoint, assaulted, tied up during Bitcoin transaction
- Province providing Winnipeg police with $100K to combat cybercrimes
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