Canadian man out $81,000 in cryptocurrency scheme

How Canadians are falling for cryptocurrency scams The Better Business Bureau say scammers are using social media to lure people to websites that are actually fronts for criminals.

Jason Tschetter of Camrose, Alberta wanted to invest to help his growing family and researched cryptocurrencies before putting some money into a trading platform online.

But he was shocked when he ended up losing $81,000 in a scam.

"In a time of uncertainty like this you have to wonder how you are going to keep food on the table," Tschetter told CTV News Toronto.

"We are devastated, and our family is devastated. I've had to go back to work on a seven-day rotation to work everyday. Losing this much money has ruined things."

Juliana Fairburn of Scarborough, Ont. invested in cryptocurrencies after a friend suggested she could do it to make extra money.

Fairburn put $30,000 into a cryptocurrency trading platform, funds she needs as a down payment for a condo she plans to purchase.

For the past six months she has been trying to get the money back, but she is locked out of her trading account and no one is answering her calls or emails.

"I've accepted already that maybe the money is gone, but I really need that money back," Fairburn said. "That money we put into this cryptocurrency investment is needed for the closing costs for the condo we bought."

The Better Business Bureau (BBB) said that cryptocurrency fraud is now the number one scam in Canada with investors young and old falling for crypto scams online.

"It's unfortunate because a lot of Canadians are interested in cryptocurrencies right now because they think they are going to become rich fast," said Jessie St-Cyr, the Communications manager for the BBB serving Canada’s Northern Capital Region and Quebec.

The BBB said thieves are using social media to lure people onto websites that look real, but are actually fronts for criminal activity.

Victims start investing small amounts of money and put in more and more and while it appears their investments are going up, when they try to take money out – they can't.

"Older people are losing their savings and we've heard of people losing their houses and everything," said St-Cyr who added “We’ve heard from consumers who lost $180,000 and another person who lost $90,000.”

Tschetter has started a website to help other victims of cryptocurrency scams to try and raise awareness of what’s happening because many people who have been scammed feel like they have nowhere to turn.

"I want to fight back because the only way we can do that is to get the victims of fraud to come forward," said Tschetter.

Both victims used the middleman service Shakepay to invest in the cryptocurrency platforms used in the alleged scams.

The Montreal-based technology company is used to process transactions between investors and legitimate cryptocurrency account holders. When CTV News Toronto reached out to Shakepay, a spokesperson cautioned that investors need to do their due diligence and research before investing in any cryptocurrency or cryptocurrency company.

"Shakepay is a regulated Money Service Business (MSB) that complies with consumer protection laws and takes the protection and security of our customers seriously. Unfortunately, like any financial services company, whether they deal with Canadian dollars or cryptocurrencies, we are not immune to the threat of scammers and fraudsters who seek to take advantage of our customers," the spokesperson said in a statement.

"Shakepay allows its customers to deposit and withdraw cryptocurrency from their account as they please, similar to a wire transfer in the traditional financial system, except that blockchain transactions are immutable and irreversible. We have compliance and fraud prevention controls in place to detect, deter, and limit the risks associated with customers being scammed. For example, prior to customers sending their first cryptocurrency transfer, a pop-up screen notifies them that blockchain transactions are irreversible and that they should be wary of any potential scams or fraudulent requests."

If you've been the victim of a cryptocurrency scam, you should report it to police and the Canadian Anti-Fraud Centre and watch out for offers to invest in crypto in texts, e-mails or on social media platforms.