The Alberta Securities Commission (ASC) has announced the launch of ScamShield: Investor Protection Challenge, which aims to find new and innovative solutions for the growing issue of online crypto investment fraud.
Submissions for the challenge, which features a prize pool of up to $130,000, are open until Nov. 4, the ASC’s news release said.
The ASC is working together with the Edmonton Police Foundation (EPF) and Edmonton Police Service (EPS) on this initiative to improve its efforts to protect investors and to strengthen Alberta’s capital markets, the news release added.
“By working hand in hand with the EPS and ASC, we can support law enforcement efforts, provide additional resources, and foster innovation to address emerging threats effectively,” said Ashif Mawji, board member of EPF, in the news release.
“Online crypto investment fraud has become a preferred technique for scammers, taking advantage of the general public’s lack of experience with crypto as a high-risk investment vehicle, and the inherent challenges in tracing cryptocurrency transactions,” said Devin Laforce, deputy chief with the EPS Investigations and Support Services Bureau, in the news release.
The ASC stressed that addressing this threat called for a multi-pronged approach. To that end, the challenge seeks participation from various fields – including academia, technology, and innovation – to develop novel methods to reduce the risk of more people falling victim to scams on both a local and a national scale, the ASC said in its news release.
Crypto accounts for most investment fraud
The ASC’s news release shared relevant data for 2023. Over 60 percent of the $309 million in investment fraud reported to the Canadian Anti-Fraud Centre was related to cryptocurrency, according to the ASC’s estimates. In Edmonton, over 80 victims lost a total of over $7 million last year, the ASC said.
The ASC noted that the true impact of this issue was probably higher due to the significant underreporting of such crimes.
“Anyone can be the victim of a scam and the impact can be devastating,” said Cynthia Campbell, the ASC’s director of enforcement, in the news release.
The ASC noted that reporting these crimes could give law enforcement more information on the evolution of these scams for the purpose of improving its approach for dealing with this problem.
“As technological developments create new opportunities, criminals continually refine their methods, exploiting the digital economy in increasingly creative ways,” Laforce said in the news release. “Police continue to investigate and pursue these criminals to the fullest extent of the law, but the pervasiveness of their tactics makes this an issue we cannot tackle alone.”