More than 60 Manitobans were victims of investment fraud recently, as the number of fraudulent investment websites continues to grow, the Manitoba Securities Commission (MSC) said.
“Their lives are forever altered,” said Jason Roy, a senior investigator with the MSC.
An ongoing cryptocurrency investigation by the MSC, a division of the Manitoba Financial Services Agency (MFSA), found that the victims were scammed by 34 different fraudulent investment websites, all of which promote cryptocurrency or Forex (foreign exchange market) trading, according to an MFSA news release on Wednesday.
About 62 Manitobans lost a total of $710,000, with victims losing anywhere between $320 and $206,000, according to the statement.
“The individuals that are running these scams have become more sophisticated,” Roy said in a phone interview. They are “designed in order to trick you.”
Roy said the number of online fraudulent investment sites has been dramatically increasing over the last few years.
In 2022, investment fraud caused the highest levels of reported fraud victim losses, especially cryptocurrency fraud, according to the RCMP.
“There is certainly legitimate cryptocurrency … opportunities out there, but there are far more fraudulent cryptocurrency scamsters and websites popping up all the time,” Ainsley Cunningham, a spokesperson for MSC, said in a phone interview.
The scammers, who operate offshore but say they have offices in Canada, targeted their victims on social media, usually through fake news articles or fake celebrity endorsements.
They then got victims to invest a small amount of money – around $350, Cunningham said – and would show them fake profits, enticing them to invest more. Scammers also ask victims to convert their money to cryptocurrency, making the funds nearly impossible to recover.
“They really like to get people hooked in,” Cunningham said. “You’ll sort of think, ‘Wow, I’m making a lot of money here.'”
If victims try to withdraw their supposed profit, scammers will ignore or block them, or they might tell victims to invest more in order to make withdrawals.
“Once it’s gone, it’s gone,” Roy said.
Anger, embarrassment, frustration
Cunningham said it’s heartbreaking to tell people they are victims of fraud.
“It’s so hard to hear the stories. They’re very emotional conversations,” she said.
The victims ranged in age between early-20s to late-60s. Some lost money intended for their children or retirement savings, she said.
“There’s anger, there’s embarrassment, frustration. Some people, there’s a little bit of hope, thinking, ‘Well, maybe I still can get my money back.'”
Cunningham said she tells those who invested a small amount to look at it as an “expensive education.”
For others, the consequences are more serious and might even include having to return to work.
“It cost them a lot,” she said. “It’s painful to hear how it’s affecting their family life, their relationships.”
Cunningham said there’s thousands of fraudulent websites to watch out for.
“While we’re aware of these 34, we know that there’s many, many more websites out there,” she said.
Many sites will scam as many people as possible, shut down once they get caught, and then will pop up again under another site or company, Cunningham said.
The Manitoba Securities Commission is warning the public not to be fooled by scam artists who are working abroad in boiler rooms dedicated to frauding Manitobans. The commission says some victims have lost as much as $600,000.
There are a few ways to make sure an investment company is legitimate, Cunningham and Roy said.
People can visit aretheyregistered.ca, search the name of the company or individual in question, and find out whether the person or company is registered to do business in Manitoba or Canada.
Manitobans can also call MSC’s anti-fraud line to ask questions about a possible fraud or to report one.
“It’s important to recognize it, and it’s also important to report it,” Roy said.
“If we don’t know about it, you know, there’s nothing we can do. We can’t get the message out.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
