CoinRise Investor Losses

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CoinRise Homepage

CoinRise is apparently Canada's newest and fastest growing cryptocurrency platform, and issued a number of press releases. Their website claims an office in Canada, which is not true. They are, of course, not registered with any regulators. More than one investor has reported losses through the platform, despite an overall positive rating.

This exchange or platform is based in Canada, or the incident targeted people primarily in Canada.

About CoinRise

"Become Financially Independent! Looking for help on your journey to financial independence? Coinrise is on your side! We use our knowledge, experience and educational resources to help our clients gain a better understanding of how to meet their financial goals along their path towards financial independence." "This platform offers Saskatchewan residents opportunities to invest and trade in cryptocurrency through its online website at www.coinrise.ca."

"A pioneer in the field of cryptocurrency trade and exchange, Coinrise has been leading the industry for over 20 years. Customers can perform actions using the brand's proprietary trading platform, which is suited for all types of devices and browsers. The registration process adheres to the strictest security regulations, including an anti-money laundering standard common in the industry. Withdrawals and deposits can be completed via multiple popular payment methods, including credit cards and bank transfers. For more information, traders are invited to visit www.coinrise.ca."

"We utilize our expertise in the financial industry to help you take control over your investments and take your investment skills and abilities to the next level. Our years of combined experience working with big corporations, private equity firms, investors, governments and asset managers from all over the world, alongside our vast experience in all aspects of dealing with finances, banking institutions and capital markets, are at your service!"

"The wide array of cryptocurrencies currently being used as digital tokens has brought uncertainty upon the cryptocurrency trading market. Especially prominent is the new COTI coin, which is why the experts at leading cryptocurrency trading and exchange broker Coinrise have released an official projection regarding its future value."

"In general, there is a wide belief in the potential of COTI to go far," commented Don Lehman, spokesperson for Coinrise. "However, we advise against relying on 'prophecies' voiced by people with no experience or know-how in the field. For example, we've heard of several websites predicting that COTI will break the $1 barrier by the end of this year, but all recent signals leave doubt as to whether that can actually happen."

"VANCOUVER, British Columbia, March 3, 2021 /PRNewswire/ -- Following recent developments regarding the trade of Bitcoin ETFs in Canada, world-renowned trading and investment firm CoinRise has announced they are enhancing their service plan in the country. According to the statement released by the company, new crypto investment plans are set to be released, in accordance with the new legally tradable Bitcoin ETFs in Canada's stock market."

"For over 15 years, we've worked hard to earn our faithful customers' trust - and the growing interest in what we have to offer serves as proof that we are on the right path," said Don Lehman, CoinRise's spokesperson in a statement. "It was clear for us, as a reputable investment brand, that our clients are going to benefit from this decision taken by the government just as much as us. This has been our philosophy since day one here."

"We are committed to help you succeed, and have brought in a team of industry experts to help us set a new standard of wealth management that we will continue to upgrade and improve upon."

The Reality

"Going after clients from Canada and Israel, CoinRise broker dragged the attention of many. A seemingly legit company with its headquarters in Canada turned out to be something completely different."

"CoinRise is owned by CoinRise Ltd, based in Canada. However, brokers need to opt for an FCAA license to provide financial services from Saskatchewan." "CoinRise Ltd. is not registered to trade or sell securities or derivatives in Saskatchewan. The platform is allegedly based in Regina, Saskatchewan and has been in contact with Canadian residents." "Once we’ve determined that broker CoinRise has no official license, we checked what traders think of this charade. It turns out that the company has a bad reputation among investors, and all their bragging about 15 years on the market and secure trading with a regulated brokerage is nothing but a nice presentation."

"The Financial and Consumer Affairs Authority of Saskatchewan (FCAA) is warning investors about the online trading platform CoinRise Ltd." "FCAA strongly cautions investors and consumers to not send money to companies that are not registered in Saskatchewan, as they may not be legitimate businesses and you may lose your money."

CoinRise issues a press release reporting that as a veteran cryptocurrency trading platform, they've been recognized as Canada's fastest-growing platform for financial cryptocurrency matters in 2021. Despite a decline in overall interest in cryptocurrencies compared to the previous year, Coinrise has maintained its competitive edge by offering favorable market conditions and exceptional customer service. The company's spokesperson, Don Lehman, attributes their success to a client-centric approach and emphasizes their commitment to continually improving services and trading conditions. Coinrise offers a range of financial services beyond cryptocurrency trading, including venture capital and private equity, with various account types to suit different budgets. Customer support is available through multiple channels, including email, phone, chat, and social media platforms.

What Happened

"CoinRise claims to be Canada's fastest growing cryptocurrency trading platform, among other claims. The commission said at least one person from Nova Scotia has invested with CoinRise. It said the investor's account on the platform showed profitable gains on their principal investment, however, when the investor tried to withdraw their funds, they were able to withdraw only a small amount. Subsequent withdrawal requests were ignored."

Key Event Timeline - CoinRise Investor Losses

Date	Event	Description
December 8th, 2021 7:00:00 AM MST	CoinRise Press Release	CoinRise issues a press release reporting that as a veteran cryptocurrency trading platform, they've been recognized as Canada's fastest-growing platform for financial cryptocurrency matters in 2021. Despite a decline in overall interest in cryptocurrencies compared to the previous year, Coinrise has maintained its competitive edge by offering favorable market conditions and exceptional customer service. The company's spokesperson, Don Lehman, attributes their success to a client-centric approach and emphasizes their commitment to continually improving services and trading conditions. Coinrise offers a range of financial services beyond cryptocurrency trading, including venture capital and private equity, with various account types to suit different budgets. Customer support is available through multiple channels, including email, phone, chat, and social media platforms.
December 22nd, 2021	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
January 11th, 2022 10:48:00 AM MST	CBC News Article	CBC reports that the Nova Scotia Securities Commission has issued a warning regarding CoinRise, a cryptocurrency trading platform that claims to be Canada's fastest-growing. The commission stated that CoinRise is not registered to trade in securities or derivatives in Nova Scotia, making it illegal to solicit investments in the province without proper registration. The warning comes after at least one person from Nova Scotia reported issues with withdrawing funds from their CoinRise account. CoinRise had previously claimed to be based in Regina, Saskatchewan, but later changed its location to Halifax, Nova Scotia. The commission advises investors to conduct thorough research and use online resources to make informed investment decisions.

Technical Details

TBD

Total Amount Lost

The total amount lost is unknown.

Immediate Reactions

"After that alert was issued, CoinRise changed its location on its website from Regina to Founders Square at 1701 Hollis St. in Halifax. Founders Square does not list CoinRise as a tenant on its website."

"The internet can be a dangerous place to shop for investments but can also be a valuable tool for avoiding financial loss. A simple online search can reveal alerts and warnings, complaints, reviews and other useful information to help investors make informed investment decisions," said Stephanie Atkinson, director of enforcement for the Nova Scotia Securities Commission, in the news release.

"Anyone who invested with, or was contacted by anyone claiming to act on CoinRise Ltd.'s behalf was asked to call the financial and consumer affairs authority's securities division at 306-787-5936."

"This is a scamming platform. I trusted them with my funds and regretted it in the long run. It took a long time before I could be able to hold them liable for what they had done. It is a pattern of theirs to lure you in with investment plans, with you thinking you'll be entitled to profits and even access to withdraw your funds outrightly, they deny you all these. In my own case, Gammarecoup. Tech took it into their hands to help adjudicate and resolve the matter. 150% to 2000% After 1 to 125 Business Days is all a sham. I got back my funds and they got blacklisted as far as I am concerned. I advise you to do same."

Ultimate Outcome

TBD

Nova Scotia Security Commission

CBC reports that the Nova Scotia Securities Commission has issued a warning regarding CoinRise, a cryptocurrency trading platform that claims to be Canada's fastest-growing. The commission stated that CoinRise is not registered to trade in securities or derivatives in Nova Scotia, making it illegal to solicit investments in the province without proper registration. The warning comes after at least one person from Nova Scotia reported issues with withdrawing funds from their CoinRise account. CoinRise had previously claimed to be based in Regina, Saskatchewan, but later changed its location to Halifax, Nova Scotia. The commission advises investors to conduct thorough research and use online resources to make informed investment decisions.

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

Ongoing Developments

TBD

Individual Prevention Policies

When using any third party custodial platform (such as for trading), it is important to verify that the platform has a full backing of all assets, and that assets have been secured in a proper multi-signature wallet held by several trusted and trained individuals. If this can't be validated, then users should avoid using that platform. Unfortunately, most centralized platforms today still do not provide the level of transparency and third party validation which would be necessary to ensure that assets have been kept secure and properly backed. Therefore, the most effective strategy at present remains to learn proper self custody practices and avoid using any third party custodial platforms whenever possible.

Store the majority of funds offline. By offline, it means that the private key and/or seed phrase is exclusively held by you and not connected to any networked device. Examples of offline storage include paper wallets (seed phrase or key written down and deleted from all electronic media), hardware wallets, steel wallet devices, etc...

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

While the specific details of what happened are not known, firms can prevent customer funds from being mishandled through the use of multi-signature wallets. The full backing of customer funds can be demonstrated through reviews by trusted entities.

All wallets, minting functions, and critical infrastructure should be implemented with a multi-signature requirement, with a recommended minimum of 3 signatures required. This means that making important changes or approving spending will require the keys held by at least 3 separate individuals within the organization to approve. The multi-signature should be implemented at the lowest layer possible, all key holders should have security training, and all key holders should be empowered and encouraged to exercise diligence.

All aspects of any platform should undergo a regular validation/inspection by experts. This validation should include a security audit of any smart contracts, reporting any risks to the backing (of any customer assets, ensuring treasuries or minting functions are properly secured under the control of a multi-signature wallet, and finding any inadequacies in the level of training or integrity of the team. The recommended interval is twice prior to launch or significant system upgrade, once after 3 months, and every 6 months thereafter. It is recommended that the third party performing the inspection not be repeated within a 14 month period.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

The primary problem is surrounding education for new investors. This situation can be prevented through reviews by trusted entities to ensure that all customer funds are fully backed, and the setup of a multi-signature website.

Create a standard tutorial and quiz for all new cryptocurrency participants, which is required to be completed once per participant. This tutorial and quiz should cover the basics of proper seed phrase protection, strong password generation, secure two-factor authentication, common fraud schemes, how to detect and guard against phishing attacks, how ponzi schemes work, as well as other risks which are unique to the cryptocurrency space.

All platforms should undergo published security and risk assessments by independent third parties. Two assessments are required at founding or major upgrade, one after 3 months, and one every 6 months thereafter. The third parties must not repeat within the past 14 months. A risk assessment needs to include what assets back customer deposits and the risk of default from any third parties being lent to. The security assessment must include ensuring a proper multi-signature wallet, and that all signatories are properly trained. Assessments must be performed on social media, databases, and DNS security.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.