Beware of Cryptocurrency Scams

Cryptocurrency transactions are final, non-refundable, and cannot be reversed. Once your funds are transferred, they cannot be retrieved – even in cases of fraud. For this reason, it is critical that you fully understand the nature of the transaction.

Below are common types of scams associated with crypto. Please review them thoroughly.

Common Types of Cryptocurrency Scams

1. Fraudulent Investment Platforms

These scams involve websites or mobile apps that appear to offer crypto investment services, often promising unusually high returns with little to no risk. These platforms are often discovered through online advertisements, social media promotions, or personal referrals, giving them an appearance of legitimacy. Fabricated dashboards showing fake earnings are designed to create a false sense of profitability and encourage additional deposits.

Some fraudulent platforms may initially allow small withdrawals to create the appearance of legitimacy and build trust. This tactic is often used to encourage users to deposit larger amounts. However, once more significant funds are sent, attempts to withdraw are typically met with delays, demands for additional payments (such as taxes, unlock fees, or minimum balance requirements), or complete loss of access.

In Canada, all platforms offering cryptocurrency services, except self-custodial wallets, are subject to regulation and must be registered or licensed with the appropriate regulators.

Canada maintains public registries of such licensed and registered financial companies, such as the Money Services Business Registry and the list of Restricted Dealers authorized to custody user’s crypto funds. These registries allow users to verify whether a platform or service provider is properly authorized to operate either as a money services business (MSB) or as a restricted or investment dealer.

Money services business and restricted dealer registration are two separate undertakings and involve different activities. For instance, money services businesses are mandated to immediately deliver purchased cryptocurrency to their clients’ personal non-custodial wallets whereas restricted dealers are allowed to keep their clients’ virtual assets in their custody.

Before engaging, always conduct thorough due diligence. Check online for any investor alerts or warnings issued by regulatory authorities such as the Canadian Securities Administrators (CSA) or the Autorité des marchés financiers (AMF). The presence of such notices, or credible reports of fraud associated with a platform, should be treated as serious indicators of potential risk.

If funds have already been sent and there are concerns about the legitimacy of the platform, it is advisable to pause any further transactions. Under no circumstances should additional funds be sent until the situation has been fully assessed. In nearly all cases, the crypto sent is unrecoverable.

Red flag: Promises of guaranteed returns or profits, especially with little explanation of how they are generated.

2. Crypto Guidance Scam

This scam typically begins with someone offering to help an individual create a cryptocurrency wallet or guide them through the basics of crypto investing. The fraudster may present themselves as a knowledgeable friend, a crypto enthusiast, or even tech support from a wallet provider met in person or often virtually. Under the pretense of assistance, the scammer may either directly observe the seed phrase during wallet setup—such as through a screen share or by watching a screenshot being taken—or manipulate the target into revealing it, claiming it's necessary for troubleshooting or backup purposes. In reality, this gives the scammer full control of the wallet and any funds within it.

What makes this tactic particularly dangerous is the appearance of legitimacy. Scammers may use real tools like trusted wallet providers, speak fluently in crypto terminology and create a sense of urgency to lower the individual’s guard. In some cases, they even fund the wallet to build trust before draining it later. Once the attacker has the seed phrase or access credentials, they typically empty the wallet without warning and cut off all contact.

Red flag: Anyone offering to directly “help” with wallet setup who asks to see or store the seed phrase—even temporarily—may be attempting a scam. The seed phrase should never be shared, not even with someone claiming to assist. Even if the scammer doesn't explicitly ask for it, they may still gain access by observing your screen during a screen share, video call, or remote session. Always ensure your seed phrase is kept completely private and off-camera.

3. Financial Advisor Scam

These scams involve fraudsters posing as licensed financial advisors, portfolio managers, or cryptocurrency consultants who claim to offer professional investment services. They often present themselves with convincing credentials, polished websites, sophisticated communication, and even use falsified IDs to appear legitimate. Their goal is to persuade individuals to transfer funds or cryptocurrency to accounts supposedly managed for investment purposes.

Typically, these fake advisors promise guaranteed or unusually high returns through “exclusive” crypto investment programs, automated trading systems, or insider market opportunities. To build credibility, they may share fabricated reports or show fake profits on dashboards. Some may even allow small withdrawals early on to create a sense of trust and legitimacy before blocking access or disappearing once larger deposits are made.

In Canada, genuine financial advisors and firms must be registered with recognized regulatory authorities such as the Canadian Investment Regulatory Organization (CIRO), previously known as the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA), or provincial securities regulators under the Canadian Securities Administrators (CSA). Their registration and licensing status can be verified using the CSA’s National Registration Search tool. Advisors who offer or manage crypto-related investments must also comply with specific regulatory requirements and hold proper registration for dealing in digital assets.

Fraudulent advisors often reach out through social media, professional networking sites, or online advertisements. They may target individuals looking for retirement planning, new investors seeking guidance, or those curious about cryptocurrency. They may even create fraudulent platforms or fake investment opportunities to lure individuals into signing up before contacting them directly. By using technical jargon, testimonials, or fake client success stories, these scammers create the illusion of professionalism and urgency to pressure quick decisions.

Red flag: Anyone claiming to be a “licensed crypto advisor” or “investment specialist” who cannot provide verifiable registration details, pressures you to act quickly, or requests direct crypto transfers is likely running a scam. Stay especially cautious of “financial advisors” operating from outside your country or lacking a verified identity and online presence on reputable platforms such as LinkedIn that allow identity verification.

4. Romance or Relationship-Based Scams

These scams often begin on social media platforms, messaging apps, or online dating sites. A fraudster builds trust over days, weeks, or even months by engaging in frequent, personal, and emotionally intimate conversations. Once a sense of connection is established, the conversation gradually shifts toward financial matters—typically in the form of a cryptocurrency “opportunity,” investment tip, or an urgent personal need requiring financial assistance.

What makes these scams particularly dangerous is their emotional manipulation. The scammer may present themselves as a successful investor or businessperson, or as someone facing a temporary hardship. They may share screenshots of fabricated profits or introduce users to fake platforms, often offering to “walk them through” the process. The aim is to create a sense of partnership or obligation that motivates the target to send funds.

After the first transfer, the scammer may continue communication and even request further deposits. However, once they believe the maximum amount has been extracted, they cut off contact—often without warning. In nearly all cases, the crypto sent is unrecoverable.

Red flag: Any online acquaintance or romantic interest requesting money, especially in crypto, or encouraging you to use a specific investment platform.

5. Impersonation Scams (Government, Bank, Tech Support)

Impersonation scams involve fraudsters posing as trusted authorities such as government agencies, law enforcement, financial institutions, or well-known technology companies. These scammers typically contact individuals by phone, email, SMS, or messaging apps and use fear or urgency to pressure immediate action.

Common tactics include claims of unpaid taxes, compromised accounts, identity theft investigations, or issues with financial transactions. The individual is then instructed to resolve the matter by sending funds—often in crypto—to a wallet address provided during the conversation. The scammer may even use spoofed phone numbers, realistic emails, or forged documents to appear legitimate.

These interactions are carefully scripted to discourage the target from seeking external advice or taking time to verify the claims. In nearly all cases, the crypto sent is unrecoverable.

Red flag: Any unsolicited request to send crypto from someone claiming to be from an institution. No legitimate agency will ever ask for crypto payments.

6. Recovery Scams

After losing funds in a cryptocurrency-related fraud, individuals are sometimes contacted—often through email, social media, or phone calls—by someone claiming to be a recovery specialist, law firm, cybersecurity expert, or even a government investigator. These actors promise to help trace and recover lost funds in exchange for an upfront fee or access to additional personal information.

In reality, these are secondary scams designed to exploit those who have already been defrauded. Scammers often gather leads from online forums, complaint boards, or previous scam databases. They may provide convincing documentation or appear knowledgeable about the original fraud, all to establish credibility and urgency.

It's important to understand that cryptocurrency transactions are irreversible. Once funds have been sent, they cannot be retrieved unless the recipient willingly returns them. There are no legitimate services or institutions that can "unlock" or forcibly recover lost crypto from a third party.  In nearly all cases, the crypto sent is unrecoverable.

Red flag: Requests for upfront payment in exchange for “recovery services” or legal help to get your funds back.

Before You Proceed

Take a moment to stop and think carefully before finalizing a transaction. Cryptocurrency transfers are final and irreversible. There is no way to recover funds once they have been sent.

Crypto should only be sent to a self-custody wallet—one to which only you have access to the private key—or to a registered, reputable crypto platform. Transferring funds to third parties, shared wallets, or unknown platforms significantly increases the risk of loss and fraud.

As a regulated Canadian Money Service Business, EZO facilitates secure transactions with extensive compliance checks. However, EZO does not provide investment advice and cannot confirm the legitimacy of third-party platforms or individuals.

Before pursuing a cryptocurrency transaction, please ensure the following:

• You are not acting under pressure, persuasion, or on the advice of any third party claiming to assist with investments, fund recovery, or other financial opportunities.
• You confirm that you maintain exclusive control of your wallet and have safeguarded your seed phrase against loss or compromise.
• You understand that transactions are final, and that the funds cannot be retrieved, reversed, or recovered once sent.

If there is any uncertainty, pause and seek independent clarification before proceeding.

By accessing and using EZO's services, you confirm that for each of your transactions:

1. You approve and confirm that the provided receiving account/wallet details are accurate.
2. You confirm that the decision to enter into transactions is solely your own, made independently and without coercion, instruction, or influence from any third party. 
3. You acknowledge awareness of potential cryptocurrency-related fraud and scams and affirm that your transactions are not being made under duress or as a result of any fraudulent scheme, misrepresentation, or undue influence.
4. You confirm the funds you use to purchase cryptocurrency are from legitimate, lawful sources. You affirm that the funds you use are not derived from illegal activities, and are not connected to any other form of financial crime.
5. Transactions are final and irreversible once processed. You understand and agree that neither EZO or its payment partners are liable for any payment reversal under any circumstances, and you acknowledge that EZO has conducted sufficient due diligence prior to each transaction
6. All transactions are subject to EZO’s Terms & Conditions and Privacy Policy. You acknowledge having read and accepted them.
7. You acknowledge that EZO is not liable for delays caused by third-party financial institutions, blockchain congestion, or regulatory requirements.

Last Review

These terms were last updated on 2026-03-25.