A Calgary man is speaking out after losing several thousand dollars in a cryptocurrency scam, including money he borrowed from his bank.
Joel Woodhouse says he’s out approximately $16,000 in Bitcoin after investing with an online crypto brokerage, WinBitX, which he saw advertised on Facebook.
“Their claim was that if you invest in cryptos with them, they will trade them and make profit and then take a commission, not the profit that they make for you,” Woodhouse said. “I signed up on their website, gave my name and my email, and then I was shortly after contacted by the company.”
Woodhouse believed the front he was seeing, with the company’s representatives showing him statistics and other data to convince him they would earn a profit on his investment.
“They’re very persistent with their phone calls, and over the months they gained my trust,” Woodhouse recalled.
“And during this whole time, every time I would send a bit of money, they would show me the profits that I was making and always saying that if I get more in, I’ll be able to get more profits.”
Woodhouse says he planned to keep a baseline amount in the account while withdrawing the earnings to pay bills.
When he went to make his first withdrawal, nobody answered his calls or emails.
That’s when the red flags started going up.
Woodhouse had started investing with WinBitX near the end of April 2021, and says that it was near the end of August when he realized he may not be getting his money back.
“They always had some story and some excuse of why my investments couldn’t be accessed, and it usually came down to I had to pay them more money in order to access my investments,” said Woodhouse.
The loss hit Woodhouse not only in his wallet but in his pride.
“It was something that I didn’t really talk about in the beginning because, partially, I was in denial that it was gone. I had talked to friends about what was going on and the possibility of it being really good, and then finding out that it was all a scam, having to like, really swallow that failure,” Woodhouse said.
“I was embarrassed and I felt stupid and betrayed.”
Tom Keenan is a University of Calgary professor and the author of Technocreep.
He says that scams are more common in the crypto world.
“The Internal Revenue Service in the U.S. and Revenue Canada are just starting to come out with rules on how you have to report gains that you made on crypto,” said Keenan.
“So it’s pretty early days as opposed to, you know, a real estate scam or a stock trading scam, where there are people whose job is to regulate it. We’re still coming up with that infrastructure.”
The company’s website is no longer active, but Woodhouse says he is still being harassed by regular calls.
“I don’t answer the phone anymore. I did answer it last week to politely request them to stop calling me, and then that ended in them just threatening me and saying that they know where I live,” Woodhouse said.
“But they keep up the facade that they’re a legitimate company and that I still have access to my investments and that if I just do what they’re asking, I’ll get it back.”
Woodhouse has expressed concern that the people behind the scam are professionals who have access to his address. CBC News has agreed not to publish a photo of Woodhouse as he fears for his safety.
A quick search of the company name returns several accounts of similar scams to what Woodhouse experienced, as well as advertisements for recovering lost cryptocurrencies.
The company also seems to be under scrutiny from the Financial Conduct Authority in the United Kingdom.
Woodhouse has filed a complaint with the Calgary Police Service but says he isn’t too hopeful they’ll be able to track down the fraudsters and get his investment back.
In a statement to CBC News, the police service said a criminal investigation wasn’t warranted.
“From the information we had available at the time of the report, it appeared that this was not considered a criminal event,” the statement said. “The complainant was advised to pursue civil action and a [Better Business Bureau] complaint.”
Woodhouse has looked at other recovery options online, but he worries he might just be signing up for another scam.
“Unless there’s some organization like the RCMP or something that is so legitimate that I would trust to go in with, I don’t know if there’s anything that can be done at this point.”
Keenan says that the usual methods of filing a police report aren’t as effective with crypto losses.
“The problem with crypto is the trail gets lost really quickly. You can make an account that’s totally anonymous, and the only way you get access to it is by knowing the wallet ID and the password,” said Keenan.
“So if I don’t know who got that money, how am I ever going to go and get it back from them? And the answer is, you just can’t.”
Adding insult to injury was the source of the funds that Woodhouse invested.
Convinced that he would be earning interest, he says he took out a $10,000 line of credit with the strategy of paying it back using the gains his investments made.
Now he’s stuck with the debt.
“Those were all my adult choices to do these things and they do have assistance for fraud, but I don’t fall under any of it. Because, you know, they didn’t hack into the bank account, I made the withdrawal of the money,” said Woodhouse.
As far as the cash goes, Woodhouse is coming to terms with the loss.
But the situation he found himself in is inspiring a potential business opportunity.
He’s now looking into starting an organization that can help people who find themselves the victims of cryptocurrency scams.
“I just see it as an opportunity to provide a service for people so they won’t be let down or to have somewhere to turn that they can actually trust,” Woodhouse said.
“I can only imagine that more people are going to fall victim to this stuff and I can already tell that there is minimal support for people. So that’s kind of where we’re looking down the line as to how we can provide a service for something that isn’t being really answered right now for people like myself and others.”
Keenan says people don’t need to be scared of investing in crypto but advises against taking risks with lesser known companies.
“You have to keep your head screwed on right and make sure that you’re dealing with people that you trust, and that could be your bank or a major company that’s a crypto exchange,” said Keenan. “And if somebody calls you on the phone, that’s almost a certain sign that you don’t want to deal with them. If it’s something you found Googling on the internet or they sent you an unsolicited email, that’s a bad sign.”
“So basically, if you don’t recognize the company, you shouldn’t give them money.”
Though he spent some time licking his wounds, Woodhouse says he is getting back into the market.
“I learned a lot from this experience, and overall, it’s just made me wiser financially, and now I’m back on the horse. I’m just doing things … wiser.”
He hopes his story can serve as a cautionary tale to others who might be looking to invest.