In a news release that the Toronto Police Service made available today, investigators are warning the public about prevalent over-the-phone schemes involving digital currencies.
The release arrives courtesy of the Financial Crimes division. Formerly known as the Fraud Squad, the division looks to prevent and crack down on illegal financial acts and fraud.
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“Bitcoin is fast becoming the preferred payment mechanism utilized by people committing so-called CRA Scams,” the division stated. “Many [Greater Toronto Area] victims have lost thousands of dollars to suspects utilizing this method.”‘CRA Scams’ are a type of scheme where fraudulent actors attempt to deceive the public into believing that they are contacting on behalf of the official tax agency. Often, these scams use threatening language to pressure victims and deceive them into sending money that is not actually owed.In these instances, victims are threatened with possible arrest and told that they have violated tax laws. They are then instructed to to make an immediate payment, often through Bitcoin, in order to prevent their arrest."Increasingly, victims are being told to attend various Bitcoin [ATMs] where they will deposit cash in order to obtain and transfer Bitcoin to other electronic “wallets,” the owners of which may reside outside of Canada," the release added. "Once Bitcoin is sent it becomes virtually untraceable."
While schemes utilizing digital currencies may paint the industry in a negative light, these types of scams existed long before Bitcoin, and continue to use other methods of soliciting money from victims.Even with many honest actors in the space, popular platforms tend to attract individuals looking to use their features to their advantage. Toronto police advise that while the CRA may compel payment from individuals via legal means such as courts, it does do not contact people over the phone to solicit owed debt via “Bitcoin or any other cryptocurrency.” The release further explained that the warning is a part of the Toronto Strategic Partnership, a collaboration between the Financial Crimes Unit of the Toronto Police Service and other national and international law enforcement bodies. “Members of the Strategic Partnership are encouraging the public to be vigilant regarding the use of Bitcoin in the furtherance of fraudulent and extortionate acts,” it added. Image credit: Toronto Police logo
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