Beware of Crypto Currency Investment Scams

Over the last two months I have met with two individuals who suffered serious financial losses due to “investing” in what they thought were legitimate crypto currency investments only to find out that they were just scammed out of their life savings and even went into debt chasing the money they had already lost in an effort to get it back.
When asked what they knew about crypto currencies and the companies they were dealing with, their responses were severely lacking in any substantive manner. They literally had no understanding of what this type of investment was, nor had they done any research on the on-line companies they were dealing with.
Their losses could have been avoided had they informed themselves of the nature of investing in crypto currency and done some basic research on the companies they were dealing with.

Some of the research they could have done includes:

1. Reviewing on-line reviews of the company. In both these cases, the on-line reviews would have alerted them that this was not a place to invest their hard earned money.
2. Reviewing on-line scam identification websites to see if the company was listed as a scam.
3. Reviewing the company’s web-page. In both these circumstances, the companies had no physical address listed, no telephone numbers, and none of the people associated with the company were identified. Why would you ever hand over your money to people you do not know, have never met other than through email and who do not show who they are or where they are located. If a stranger knocked on your door, told you that they had a great opportunity to make you some money, would you hand them all the funds you had? I would hope that the answer is a firm no!
4. Check with your local Securities and Exchange Commission. In these cases, the company purported to be registered for the sale of securities in Alberta, but when we checked with the Securities and Exchange Commission, they were not authorized to deal in the sale of securities in Alberta.

In both these cases the chances of ever getting their money back is virtually nil. The individuals have filed complaints with the authorities who have told them that their money is gone.
Before making any investment, you need to have a firm understanding of the risks associated with the type of investment you are contemplating getting into and how and when you can equivalently get out of the investment an get your money back when you want it back. Make sure that you are dealing with a licensed investment broker in your Province, who has a physical address, contact information and someone you can physically meet with. In today’s on-line environment, we all too often “shop on-line” but when it comes to investing, I would suggest that you have the right to physically meet with the individual that you are entrusting with your money. An investment broker will cost you money for their services but I would venture to say that the costs are less than losing your entire investment.