Police warn of Cryptocurrency fraud schemes

Police warn of cryptocurrency fraud schemes

Bitcoin fast becoming the preferred payment mechanism in CRA scams

James Langton May 25, 2018

Fraudsters and extortionists are increasingly turning to the bitcoin cryptocurrency to help carry out their scams, Toronto police warn.

The Toronto Strategic Partnership against Cross Border Fraud — which represents a collaboration between the financial crimes unit of the Toronto police and other national and international law enforcement agencies — on Friday issued a warning to the public about the increasing use of Bitcoin in various types of common fraud schemes.

“Bitcoin is fast becoming the preferred payment mechanism utilized by people committing so-called CRA scams,” police say in a news release. In these sorts of scams, fraudsters impersonate Canada Revenue Agency (CRA) personnel and call taxpayers demanding payments in order to avoid being arrested on fictitious charges.

“Victims are advised that immediate payment via Bitcoin ATM will prevent their arrest,” policy say. Many victims in Toronto “have lost thousands of dollars to suspects utilizing this method.”

Police remind the public that the CRA does not compel tax payments by threatening taxpayers with arrest over the phone, nor does it require them to pay fines using Bitcoin, or other cryptocurrencies.

Operators of retail stores that have Bitcoin ATMs on site should “be aware of this method of victimization and to take appropriate action to inform their customers accordingly.”

Earlier this week, securities regulators in Canada and the U.S. announced a crackdown on investment scams involving fraudulent initial coin offerings and cryptocurrency products, known as Operation Cryptosweep.

The effort has produced approximately 70 investigations and 35 enforcement actions so far this month, regulators say. https://www.investmentexecutive.com/news/industry-news/police-warn-of-cryptocurrency-fraud-schemes/