Financial regulators have taken important steps to mitigate crypto risks to consumers and the economy, but safety and security issues still remain
One in 10 Canadians aged 16 and older (about 3 million people) have owned a crypto-asset such as Bitcoin, Ether or a non-fungible token (NFT). Of them, one in three (35 per cent) of crypto-owners reported at least one experience of fraud, scam or criminal victimization.
Most common were fraudulent crypto investment advisors, artificial inflation of assets through misinformation, or persons carrying out scams to access crypto wallets. Negative experiences were most common among people with lower incomes and less education.
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The findings are according to a new research report published by the Dais at Toronto Metropolitan University, and supported by Rogers Cybersecure Catalyst.
The report, Risky Business: The Cyber and Sociotechnical Security Threats of Crypto-asset Trading, is based on a mixed-method approach of an extensive literature review, and a representative survey of Canadians and their experiences with crypto-asset trading.
The country-wide survey was conducted online in October 2022 by the Dais research team with 2,000 residents in Canada aged 16 and older.
The research identifies four categories of threats to those who own crypto-assets, including examples of cyber attacks and hacks exploiting technical vulnerabilities for financial theft, data breach, and other criminal purposes.
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Among the key findings:
- One in 10 Canadians (around 3 million people) have owned a crypto-asset such as Bitcoin, Ether or NFT.
- One in three (35 per cent) of owners reported experiencing crypto fraud or scams, with higher rates among lower-income and less-educated populations.
- A larger share of self-reported crypto owners are men, younger, university educated and higher income.
- Nearly one in five (19 per cent) owners report having been targeted with online harassment that caused them to fear for their safety, compared to 6% of those who have not owned crypto.
- Canadians have extremely low levels of trust in crypto-asset exchanges, even before the collapse of the FTX exchange in late 2022.
“Our first report on this topic provides the latest evidence that while federal financial regulators have made commendable efforts to protect Canadian crypto-asset owners, more needs to be done to address the cybersecurity and sociotechnical threats, including enhanced public awareness of these threats, consumer protection, and deeper understanding of the groups of Canadians being harmed, said André Côté, report co-author and director of policy and research at the Dais.
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