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Best Practices for Fraud Prevention

  • Updated


The cryptocurrency investment landscape is new and exciting, with many possibilities for high returns. Unfortunately, it has also attracted a variety of fraud, scams and dubious investment platforms. 

The cryptocurrency industry attracts more fraud and scam attempts than other areas in finance because of the irreversible nature of cryptocurrency transactions, the novelty of the space, and the general lack of public awareness.

Below is a catalogue of common schemes used to target cryptocurrency investors, and some general principles for avoiding them. Some of these schemes are meant to gain unauthorized access to your account, in order to withdraw funds. Others are more subtle, and have the goal of getting you to willingly send your funds to a fraudster, or to hand over access to your personal information, which could be sold or used to open a fraudulent account in your name. 

 Most importantly, you should know that Bitbuy is NOT partnered with any other investing platforms, employment sites or rental platforms. Anyone who is asking you to send money to Bitbuy to facilitate a job, rental or investing transaction is trying to scam you.

Investment Scams

The most common scam is where a person or group pretends to be an investment advisor or trader. They will often promise oversized or guaranteed returns, and use slick marketing pages, or aggressive sales tactics to lure you into sending them money via e-Transfer or cryptocurrency. Once you send the deposit, they often disappear, but in more advanced scams, they will lead victims to believe they are earning returns by sending fraudulent statements of account. 

To avoid this scam, always use your discretion and ask plenty of questions before investing with anyone. Some red flags include a promise of guaranteed returns, promises of risk-free investing, high-pressure, or contact via “unprofessional” contact methods like social media, Telegram or WhatsApp.

Job & Rental Scams

This is a type of fraud where someone pretends to be offering a job or a rental housing, and demands payment in cryptocurrency. They often will lure victims into providing personal information, including name, date of birth, and photos of ID documents, as part of the scam. The scammer then uses this info to open a cryptocurrency exchange account, which they demand payment for the fake job/property for. Once the deposit is made, the scammer converts the funds to cryptocurrency, withdraws it and disappears.

To avoid this scam, never provide your personal info to anyone you don't trust. It's also recommended to work with a legal professional before signing any property or employment contract, and only to use Canadian Dollar transfers (i.e. wires or money orders) instead of cryptocurrencies for rental or mortgage deposits. Never send money to anyone for job-related expenses or equipment without a legal professional reviewing the contract first. 

Imposter Scams

This is a type of scam where someone poses as a public figure or investing platform using a fake domain URL or social media profile. They then lure victims to believe that they are a reputable company, often using very similar websites and marketing pages.

Often, this will be linked with a giveaway scam, where the imposter claims to be able to return multiples of any deposit paid to them in cryptocurrency. Obviously, once the imposter receives the deposits, they do not return anything, but in some cases, they may publicly post names of “contest winners” in order to lure other investors into sending money to the scam.

To avoid this scam, always ensure the person you are communicating with is an official representative of their organization. You can find Bitbuy's official website domains and social media accounts here.

Lottery Scams

This is a type of giveaway scam where a fraudster tries to convince victims that they have won some prize based on a random draw. Usually, they stipulate that the victim must pay some kind of fee or tax to collect the payment. Once the victim sends the fee, the fraudster cuts off communication and disappears.

To avoid this scam, do not reply to any unsolicited messages about lotteries or giveaways.  

Marketplace Scams

This is a type of scam where fraudsters post a fake item for sale, and then ask unsuspecting victims for payment in advance when they reach out to inquire. They might also ask the victim for their personal information to facilitate the purchase, which the fraudster uses to create a fake cryptocurrency exchange account in the victim's name. 

To avoid this scam, only use payment methods approved by the marketplace website. Never make a payment using cryptocurrency or any other third-party method. 

Romance Scams

This is a type of imposter scam where a fraudster contacts potential victims online and tries to earn their trust and affinity. Once a connection is established, the fraudster will ask the victim to help them by sending money, usually via a cryptocurrency transaction. 

To avoid this scam, never agree to send money to someone who you don't know. Be extremely wary of anyone who you have not met in person unless you can verify that they are who they say they are. 

Phishing Scams

This is a type of scam where a fraudster sets up a malicious website or sends spam emails, SMS messages or social media messages. The goal is to get you to click a link or reply to a message, and then to use this interaction to download malware to your computer or phone. 

Always be skeptical of any email, SMS or social media message which asks you for your personal information or asks you to click a link. 


If you believe you have been a victim of a scam, immediately cease any communication with the individual and report the scam along with all relevant details to your local law enforcement agency and the Canadian Anti Fraud Centre at or 1-888-495-8501.

If you have given out personal information, immediately report the incident to the Credit Bureaus  (Equifax: 1-800-465-7166 TransUnion: 1-866-525-0262) and inform your Financial Institution.

If you believe you may be a victim of an investment scam in Ontario contact the Ontario Securities Commission (OSC) at 1-877-785-1555. Outside of Ontario, you can contact the securities regulator in your province or territory.

Before signing up with any investing platform or investment management company, we strongly recommend that you review the Ontario Securities Commission's (OSC) "Investor Warnings and Alerts" page. The OSC publishes a list of platforms who are not registered to operate in the investment business, as a warning to investors.

Additionally, Bitbuy keeps an internal list of individuals and firms that have targeted clients on our platform or attempted to lure individuals using fraudulent Bitbuy branding. If you have any questions or concerns about a 3rd party platform, we encourage you to contact our Support team right away, so that we can help you check our list of identified scams and advise of any OSC warnings in place.

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