Ontario Man Loses $188,000 in Crypto Scam: Details
A man from Guelph, Ontario, lost $188,000 to a crypto scam after being tricked by someone posing as a childhood friend.
An Ontario man lost $188,000 when he tried to invest in cryptocurrency for the first time after being contacted by someone claiming to be his childhood friend. The crypto scam began in July of last year after he met an individual at a public forum who masqueraded as a tourist he had known while growing up in China.
Over the next two months, the conversation progressed from the public forum to private messages. By September, the scammer had started convincing him to consider crypto investment.
Guelph Police Service spokesperson Scott Tracey reported that the victim sent around $188,000 in different amounts, believing he was investing in a legitimate crypto project.
The Realization of the Crypto Scam
The man realized the investment was a scam when the person he was chatting with asked for verification fees of around 30%, claiming that they needed money to proceed with the investment. That was when he filed a complaint with the police in February 2024.
Since the scammer was located outside of Australia, Tracey said there was no chance of recovering the funds. Guelph Police pointed out that people who run these types of crimes are mostly not located in Canada, making the stolen funds hard to trace and recover.
The police have advised residents not to engage with strangers online, especially when investing in cryptocurrency. They emphasize the need to be cautious and justify or decline odd requests or unverifiable investment propositions.
Crypto Scam: A Rising Threat in Canada
This incident is a prime example of how crypto scams have become one of the fastest-growing threats in Canada and globally. According to statistics provided by the Canadian Anti-Fraud Centre, crypto scams caused investors to lose over $1 billion in 2023.
Fraudsters’ strategies and tactics are evolving, making it hard for victims to recognize scams. Tracey emphasized the need to double-check the credibility of the people in charge of crypto investments on the internet.
As part of their efforts to combat the rising number of crypto scam cases in the region, Canadian authorities and Chainanalysis collaborated on Operation Spincaster. A recent report by Chainalysis, an on-chain security alert platform, showed that the team has uncovered over 1,100 crypto scam cases with combined losses of $25 million.
Pastor Charged in Multi-Million Dollar Crypto Scam
Meanwhile, a 51-year-old pastor named Francier Obando Pinillo faces 26 fraud charges from people who put millions of dollars into his church crypto initiative. Authorities alleged that the scammer, previously associated with the Ministerio Apostolico Profetico Tiempos de Poder church, executed the scam from November 2021 to October 2023.
Pinillo advised the victims to invest in Solana Fi, a staking platform for huge returns. Participants raised concerns when the platform could show their balance but didn’t allow them to withdraw their funds.
Scammer Exploited Social Media
Pinillo used social media channels like Facebook and Telegram to trick over 1,500 users into this crypto scam. The pastor’s words guaranteed that investors could earn a 34.9% gain with their investment each month and added that the platform was risk-free.
Based on Pinillo’s assurance, many church members invited non-members to invest massively. In response to the victims’ inability to withdraw funds, Pinillo claimed several technicalities were involved, such as website issues or market crashes.
He even told the investors they could not withdraw until they brought in new investors to purchase their accounts. If proven guilty, Pinillo could spend 20 years in prison.
Potential Consequences and Public Awareness
The FBI probed the case, led by Assistant US Attorneys Jeremy J Kelly and Dan Fruchter. Vanessa Ruth Waldref, a top US attorney, expressed concerns that people are increasingly falling victim to such scams.
She stated that since the birth of crypto, scammers have been using it to deceive innocent people. Waldref also pointed out that some use crypto to transfer stolen funds to international bank accounts.
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