In a bid to address the growing threat of cryptocurrency fraud, the Edmonton Police Foundation has launched a contest offering up to $130,000 for innovative ideas to tackle digital investment scams. The initiative, dubbed the “ScamShield” challenge, seeks to encourage creative solutions that could protect individuals from falling victim to crypto-related fraud.
The competition, developed in partnership with the Edmonton Police Service and the Alberta Securities Commission (ASC), forms part of the foundation’s “community solutions accelerator.” This program has previously awarded prize money for efforts to reduce catalytic converter theft, and it now aims to combat a much more sophisticated type of financial crime.
Crypto Fraud on the Rise
In 2023 alone, more than 80 residents of Edmonton reported being defrauded through cryptocurrency scams, with combined losses of $7 million. On a national scale, investment fraud across Canada amounted to $309 million last year, with approximately 60% of these cases linked to cryptocurrency. The alarming rise in digital fraud has pushed regulators and law enforcement agencies to seek new ways of curbing the problem.
Cynthia Campbell, Director of Enforcement at the Alberta Securities Commission, expressed concern over the growing prevalence of crypto scams. “Everyone is at risk for these scams,” she said. “They’re not targeting people who are interested in cryptocurrency. They’re targeting anybody who has any money they want to separate them from.”
According to Campbell, more than half of the complaints currently received by the Alberta Securities Commission involve fraudulent crypto investments, making it the single largest source of fraud in the province. The complexities surrounding the anonymity and unregulated nature of digital currencies make it challenging to trace transactions, further complicating efforts to bring fraudsters to justice.
A High-Risk Investment
Edmonton Police Service Deputy Chief Devin Laforce referred to cryptocurrency as a “high-risk investment vehicle” due to the challenges associated with tracing crypto transactions. Campbell also warned that even without the presence of fraud, investing in crypto is inherently risky. She emphasized that most victims of crypto scams were not seasoned investors.
“The majority of people who are victimized by these scams don’t see themselves as investors, or didn’t start out with an intention to invest,” Campbell explained. “They are manipulated and brought into these schemes either through some form of an online relationship, or a contact that’s been made by someone telling them here’s a way they can help make ends meet financially.”
Thousands of Fraudulent Websites
One of the key tactics used by scammers is directing victims to websites posing as legitimate investment platforms. These sites often encourage individuals to convert their cash into cryptocurrency, leading to significant financial losses. Campbell pointed out that while there are “thousands and thousands” of scam websites, Canada has only 15 registered crypto trading platforms.
To address the issue, the ScamShield challenge is open to individuals in academia, technology, and innovation sectors who may have solutions to stop further victimization. The foundation hopes that these fresh perspectives can bring meaningful solutions not only to Edmonton but also on a broader, national scale. Submissions for the challenge will be accepted until November 4.
For those unsure about the legitimacy of a crypto trading platform, Campbell advised visiting Checkfirst.ca, a resource designed to help investors verify the credibility of financial platforms.
As cryptocurrency continues to grow in popularity, so does the complexity of the scams surrounding it. The ScamShield challenge is the latest attempt by Edmonton authorities to stay ahead of fraudsters, offering a significant financial incentive to those who can bring innovative, life-saving solutions to the table.
