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An illustration of a businessperson being lured by a Bitcoin off a cliff
Financial Literacy

A CPA's keen eye can detect crypto fraud

Fraud relating to crypto-assets is exploding. CPA Hélène Guilbault, an expert in the field at the Autorité des marchés financiers, explains how to spot the tell-tale signs.

Imagine you were on a dating app or social media and you meet someone who inspires confidence and claims to be able to help you make money with cryptocurrency.  

The initial returns you generate exceed your expectations, so you up the ante, until you’ve invested everything you’ve got. Only later do you realize it was all fake: fake identity, fake website, fake reports. You’ve lost everything and been the victim of a “pig butchering” scam, a type of fraud that, instead of trying to steal small sums from several people, aims to completely rob a single victim.  

Hélène Guilbault is no stranger to this type of scheme. Coordinating Investigator, Cryptoassets at the Autorité des marchés financiers, this CPA specializes in cryptocurrency fraud. In this interview, she explains how CPAs can keep an eye out for themselves and their clients. 

CPA Canada: Cryptocurrency fraud seems to be on the rise. Are you seeing this at the Autorité des marchés financiers (AMF)? 

Hélène Guilbault (HG): Since 2020, the number of complaints recorded by the AMF concerning cryptocurrencies has exploded, increasing by more than 200%. Nearly half the people who contact us to report a potential fraud have unfortunately already invested in this type of scheme and lost money. 

CPA Canada: How do you explain this increase? 

HG: The types of fraud have changed considerably over the last two decades. Digital transformation has a lot to do with this, as it gives fraudsters more powerful tools to develop new schemes, such as deepfakes and identity theft, which are on the increase. As CPAs, we must help our clients get into the habit of being more vigilant.  

CPA Canada: What role can CPAs play in prevention? 

HG: A very important role because their mission is to protect the public and to guide and help their clients make informed decisions, for example by advising them on how to assess investment proposals. 

In this example, the first thing to do is check that the adviser or firm they plan to deal with is registered, under the correct title, with the AMF’s Register of firms and individuals authorized to practice, or with other provincial authorities, such as the British Columbia Securities Commission, the Ontario Securities Commission or the Financial and Consumer Services Commission of New Brunswick.  

They can also consult the list of investor warnings issued by the AMF, which identifies websites, companies and individuals whose activities are high-risk, or visit the Canadian Anti-Fraud Centre website.

CPA Canada: Where do you start? 

HG: Certainly by reiterating basic principles, such as not investing under pressure or through a person or site that looks like it could be a fraud scheme. It may seem obvious, but when it sounds too good to be true, it probably is! 

CPA Canada: In practical terms, how can a CPA help recognize the signs of cryptocurrency fraud? 

HG: There are many red flags when it comes to investing, particularly in cryptocurrencies. Here are the main ones:  

  • You are promised high returns with little to no risk; 
  • You are told this is an exclusive offer;  
  • You are told the offer is urgent and much be kept secret; 
  • The solicitation comes from social media or is made by telephone;  
  • The name and contact details of the company providing the financial products and services are not easily accessible on the website offering them;  
  • The company or investment platform is located in a tax haven;  
  • The person requests remote access to your phone, tablet or computer. 

CPA Canada: Fraudsters are becoming more sophisticated and their techniques more convincing. What can we do about it? 

HG: To avoid identity theft, a simple solution is not to act immediately but to call the person offering financial products or services using the phone number in the register kept by the authorities—which you can also call if necessary.  

And you need to be informed. Understand that deepfakes use artificial intelligence to create highly realistic images and audio and can be used to faithfully recreate the voices of public figures or people close to you, and even to make videos that closely resemble them.  

Fraudsters can also use deepfakes to create entirely fictitious characters and invent virtual lives for them by creating fake social media profiles. In other words, deepfakes can make anyone say anything, with the aim, for example, of getting you to invest in completely fictitious investments or discrediting well-known personalities. You need to be aware of this. 

These are all good reasons for CPAs to consult and encourage their clients to consult the web pages devoted to fraud prevention on the sites of provincial or federal authorities, which contain a wealth of information on cryptocurrencies. Prevention is better than cure! 

Learn more 

Learn about the four top scams currently making the rounds and how to avoid them, as well as three common business scams. Plus, discover why young people are more likely to fall victim to financial fraud than older Canadians, according to a CPA Canada survey.