Despite the controversy surrounding cryptocurrency, its popularity is on the rise.
A recent study by KPMG found that Canada’s investment sector has actually been warming up to crypto in recent years.
However, the potential for higher returns also comes with the risk of significant losses, not to mention it is an easy target for scammers.
Why is cryptocurrency particularly prone to scams?
A recent article by the Alberta Securities Commission (ASC) cites factors like:
- Decentralization and lack of regulatory oversight;
- Price volatility;
- Rug pulls;
- And fake Initial Coin Offerings (ICOs)
If some of these terms are unfamiliar to you, you’re not alone! Check out the ASC blog linked at the bottom of this article for more information.
How to protect yourself
Before putting your hard-earned money into any investment, it is important to make sure you understand the ins and outs. What is the potential upside? What are the risks? Does the investment suit your personal risk tolerance? If you are unsure about your risk tolerance, you can take this quiz at CheckFirst.ca and follow up with a conversation with your wealth advisor.
Do your research! Go online to see if the company offering the investment is registered with the Alberta Securities Commission. CheckFirst.ca is also a great resource. Created by the Alberta Securities Commission, this site has information on identifying and avoiding investment fraud so that you can safely choose the right investments for you.
Talk to your wealth advisor. There is a reason you partner with a professional when it comes to your finances. Your advisor should be a source of information and the voice of reason about all things investing, but especially when you’re tempted to get in on ‘the next big thing’
Want to learn more? Read the ASC’s latest blog “Is crypto a good investment? Understanding the risks and rewards of crypto“.
CIBC Private Wealth consists of services provided by CIBC and certain of its subsidiaries, including CIBC Wood Gundy, a division of CIBC World Markets Inc.
David Popowich and Faisal Karmali are Investment Advisors with CIBC Wood Gundy in Calgary. The views of David Popowich and Faisal Karmali do not necessarily reflect those of CIBC World Markets Inc.
This information, including any opinion, is based on various sources believed to be reliable, but its accuracy cannot be guaranteed and is subject to change
If you are currently a CIBC Wood Gundy client, please contact your Investment Advisor.
