As cryptocurrencies gain traction in mainstream adoption, the shadow of cryptocurrency-related crimes looms larger. Canada, known for its reputation as a relatively safe nation, has not remained immune to this trend. Despite its progressive stance on digital assets, incidents of scams and crypto-related crimes are on the rise. The impact of these crimes is not just financial; they have also left emotional scars on victims and led to a decline in cryptocurrency ownership across the country.
Crypto Crime Surge in Canada
Cryptocurrency investment scams hit record highs in Canada in the past year, indicating an alarming trend. According to data from the Canadian Anti-Fraud Centre, Canadians lost a staggering $308.6 million to investment fraud in 2022, nearly doubling the $164 million lost in the previous year. Additionally, cases of armed home invasions targeting individuals for their cryptocurrency holdings have also been reported.
In one incident, a Calgary man experienced a violent home invasion in which armed assailants forced him to reveal his cryptocurrency wallet private keys at gunpoint. The attackers were aware of his involvement with cryptocurrencies, highlighting the targeted nature of such crimes. Although authorities traced the stolen cryptocurrency to an individual, the link to the actual home invasion remained elusive.
Another alarming case involved a senior citizen who fell victim to an elaborate cryptocurrency scam, losing over $7.5 million. The fraudster built trust over months of communication, convincing the victim to invest millions through a fake trading app. When the victim couldn’t withdraw funds, a second scammer further defrauded her.
Warnings from Regulators
Canadian financial regulators have issued multiple warnings about crypto-related crimes, cautioning citizens to be wary of online “millionaires” promoting cryptocurrency investments. Despite these efforts, reports indicate that British Columbians lost $24 million to crypto scams in 2022. Nationwide, Canadians lost $530 million to various fraud and cybercrimes during the same year.
Impact on Crypto Adoption
The rising incidents of cryptocurrency-related crimes have had a discernible impact on cryptocurrency ownership in Canada. Data from the Bank of Canada reveals a decline in Bitcoin ownership from 13% in 2021 to 9% in August 2022, followed by a modest rebound. Ownership of altcoins and other cryptocurrencies also dropped, indicating a potential exodus from the digital asset space.
Crypto Adoption Index and Future Outlook
Canada’s ranking in Chainalysis’s 2022 Crypto Adoption Index is middling compared to peer nations. While the United States and the UK ranked higher, Canada stood at 22nd place, suggesting a below-average adoption score. However, it is noteworthy that crypto-related crime has seen a decline this year according to Chainalysis’s mid-year crime report.
As Canada navigates the mainstream adoption of cryptocurrencies, the surge in crypto-related crimes presents a serious challenge. The impact of scams and fraudulent activities is not just monetary; it erodes trust in digital assets and has led to a decline in cryptocurrency ownership. While the authorities are actively warning citizens, the cryptocurrency industry and regulators must collaborate to foster a safer environment for investors and enthusiasts alike.