A group of cryptocurrency investors in Canada who realised they’d signed up to an illegitimate investment site got some good news as it turned out the site was actually a “fake scam” run by a local regulator.
The educational site, called TydeCoyn.ca, bore a number of hallmarks of traditional crypto investment destinations.
It had a purported wider social purpose as well as being an investment vehicle, for example, describing itself as a token which brought together “tourism promotion and environmental activism”.
It also came with a number of appealing promises designed to hook investors in. It contained a number of so-called testimonials which were actually false, for example, while it also included other common design features such as clocks and countdowns.
Testimonials claimed to be from figures as diverse as a managing partner at an investment firm to a CFO at a tourism board.
“It’s fascinating to see startups like TydeCoyn take advantage of new technologies like blockchain to add value to the industry and create new partnerships and linkages out of thin air”, one of the fake testimonials read.
Those who signed up were later informed that it was in fact a fake site designed by the Financial and Consumer Services Commission of New Brunswick, a province on the Canadian east coast.
At the time of writing, the TydeCoyn.ca site was still live. Clicking on the many call to action links, such as “Download now” or “Invest now”, leads to a page on the Commission’s website explaining that the site is in fact fake.
The Commission believes that it is simple and easy for an actual fraudster to create a website which hooks potential investors in, and that the Commission’s fake scam served as a warning.
“Cryptocurrencies, crypto assets and digital assets are new and are emerging technologies”, said Erin King, who is the Commission’s senior education and website officer.
“There is legitimate Initial Coin Offering (ICO) fundraising (similar to crowdfunding) out there but there are also fraudsters and even the legitimate offerings have a high degree of risk. Ultimately we believe the best defence is knowledge.”
A key aim of the project appeared to be to reflect the focus that many scammers place on fast action.
Most fraudsters succeed by making their victims panic or feel like they must act urgently, by describing the opportunity as a limited time investment, for example. This makes people act quickly without consulting friends or experts.
Overall, the Commission’s project is believed to have reached thousands of people.
“We had more than 4,500 people visit TydeCoyn.ca since October, and by the end of November 222 people had clicked through from the TydeCoyn site to read our education pages. We consider those 222 potential victims”, King said.
“Unlike Initial Public Offerings, most ICOs are without any formal disclosure requirements and it’s often difficult to find out who is behind the ICO and how the money raised will be spent. These types of investments are risky in the first place, but then you have these fraudsters trying to capitalize on all these interesting crypto assets”, she added.