Despite the controversy surrounding cryptocurrency, a recent study by KPMG found that Canada's investment sector has actually been warming up to it.

 

While it does offer potential for higher returns, crypto also comes with the risk of significant losses and fraud.

 

Why is cryptocurrency particularly prone to scams?

 

A recent article by the Alberta Securities Commission (ASC) attributes crypto scams to factors like:

• Decentralization and lack of regulatory oversight;
• Price volatility;
• Rug pulls;
• And fake Initial Coin Offerings (ICOs)

 

For more information on these factors, check out the ASC blog linked at the bottom of this article.

 

How to protect yourself

 

Before putting your hard-earned money into any investment, it is important to make sure you understand. What is the upside? What are the risks and can you handle them? If you are unsure about your risk tolerance, you start out by taking this quiz at CheckFirst.ca and follow up with a conversation with your wealth advisor.

 

Do your research. Check the company offering the investment out online to see if it is registered with the Alberta Securities Commission. Visit CheckFirst.ca for information on identifying and avoiding investment fraud so that you can safely choose the right investments for you.

 

Talk to your wealth advisor. Whenever you are tempted to get in on ‘the next big thing’, your advisor should be a source of information and a voice of reason.

 

Want to learn more? Read the ASC's latest blog "Is crypto a good investment? Understanding the risks and rewards of crypto".