In brief
- A Nanaimo resident lost C$5,000 in a crypto job scam before a second scheme emerged.
- Fraudsters posed as a lawyer claiming to have located $60,000 in crypto “profits.”
- Victim data is reused because those targets already showed vulnerability, Decrypt was told.
Canadian police warned Wednesday that fraudsters are using the Royal Canadian Mounted Police logo in crypto recovery schemes targeting victims who already lost funds in earlier fraud.
The warning follows a case in Nanaimo, British Columbia, where a resident who had already lost money in a crypto job scam was later contacted by someone claiming they could help recover the funds.
The victim first lost about $5,000 CAD ($US 3,600) late last year after receiving an unsolicited text message promoting a remote stock-trading job that required depositing crypto via an ATM. Communication with the supposed employer stopped soon after the payment, according to a report from CHEK.
Earlier this year, the same person encountered an online message styled as an RCMP public notice encouraging fraud victims to report similar cases.
After submitting the form, the victim received a call from a man claiming to be a lawyer who said they had identified two crypto accounts linked to the victim and could help retrieve roughly $60,000 in supposed earnings.
Police said the promotion falsely implied RCMP involvement.
“The RCMP does not contact individuals about discovered cryptocurrency accounts, partner with private firms to recover lost funds, or request any form of payment to investigate fraud. Any communication suggesting otherwise is fraudulent,” Reserve Constable Gary O’Brien, media relations officer at the Nanaimo RCMP, said in a statement.
Police said law enforcement does not advertise recovery services or ask for payment to retrieve lost funds. Officers also urged residents to be cautious of unsolicited job offers or online messages involving crypto and to verify the credentials of anyone claiming to be a lawyer or investigator.
The tactic is “increasingly systematic rather than random,” with the pattern known commonly known as a “fake recovery service scam,” Andy Zhou, co-founder and CEO of blockchain security firm BlockSec, told Decrypt.
“These schemes work largely because scammers often have access to information from the original scam,” Zhou said, citing how the FBI has previously warned how “fraud groups deliberately re-target individuals” by “posing as lawyers, recovery agents, or government partners who claim they can retrieve stolen assets.
Using branding from law enforcement is effective “because it exploits a powerful psychological mechanism known as authority bias,” he said. “When victims believe a message comes from police or a regulator, they are far more likely to cooperate or pay so-called “administrative fees” to unlock recovered funds.”
Fraud networks often reuse information gathered during earlier schemes, which can make previous victims easy targets for follow-up scams, Zhou explained. In some cases, organized groups circulate lists of individuals who have already sent money, making those victims “extremely valuable” targets for further fraud.
Attackers also exploit the fact that victims often search online for ways to recover lost funds, Zhou said. Criminals may set up fake recovery services or advertisements claiming victims appear on a government-affiliated list of scam victims whose funds can supposedly be retrieved, with the methods “designed to create urgency and credibility.”
“This tactic can be especially convincing because victims often assume that specialized law-enforcement expertise is required to trace blockchain transactions, making the story appear plausible,” he added.
Canadian police have been training in crypto investigations since 2022, as fraud cases involving digital assets have grown. The training program was introduced to help officers better understand how cryptocurrencies work and how they are used in criminal activity.
Decrypt has reached out to the RCMP for comment.
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Source: https://decrypt.co/360072/canadian-robbed-via-atm-kiosk-recovery-lead-another-scam
