Your phone rings. It's an area code you don't recognize. When you pick up, the scare tactics start, pushing you to part with your money — or face the consequences.

While that scam sounds familiar, a variation has surfaced in St. John's that blends the old con with new technology: bitcoins.

In a recording of one such scam obtained by the CBC, the call begins with the claim it's coming from the Canada Revenue Agency. A warrant for the victim's arrest is imminent, with "strong evidence" that the victim has knowingly misfiled their taxes.

Yes B'y's, on Queen Street in downtown St. John's, has one of the few bitcoin ATMs in the province. (Eddy Kennedy/CBC)

"The audit department has got strong evidence that this was not an innocent act on occasions and this was willful act done with the intent to defraud the CRA," the unidentified caller said.

To avoid the consequences — an expensive legal battle or lengthy prison sentence — the caller instructs their intimidated victim to convert cash into cryptocurrency via a bitcoin ATM and send it their way.

Yes B'y's and bitcoins

That directive has sent victims to one of the few bitcoin ATMs in the province, in Yes B'y's, a bar in downtown St. Johns.

Tara O'Reilly, the bar's owner, said a phone call two weeks ago gave her the heads-up that something shady was going on.

The man on the other end of the line had been told to go to Yes B'y's and convert $5,000 cash into bitcoin through her ATM in order to take care of his back taxes.

"When we found out this was happening, we decided to take the best course of action possible. So we did go to the police," O'Reilly said.

The phone scam sent some of its victims to this bitcoin ATM, where cash is exchanged for cryptocurrency. (Eddy Kennedy/CBC)

Since then, she said she has intercepted several other potential victims, who have all entered the bar on the cell phone and approached the ATM with a large amount of cash. Even one of her employees almost fell victim to the scam.

"I just felt like it was the right thing to do," said O'Reilly.

"I wanted to make sure that people knew that Yes B'y's is not in any way associated with this scam."

Police are aware of the bitcoin scam, although they say there haven't been any specific complaints filed about it just yet.

"Most of the ones [complaints] that we receive here at the RNC have to do with the phone scams; and they'll get you to go out and purchase iTunes cards or Amazon cards," said Sgt. Mike Summers of the Royal Newfoundland Constabulary's Economic Crime Unit.

Summers said regardless of the scenario, the CRA will always send a formal letter to get in touch.

Cryptocurrency criminals

One cryptocurrency expert isn't surprised bitcoin is being used for crime.

"With a rise in anything's popularity, criminals are always gonna be there," said Ray Bursey, the CEO and president of Ghost Technologies, the company that owns the bitcoin ATM at Yes B'ys.

Bursey says while many scammers assume that the cryptocurrencies are untraceable, that's not the case — although following the accounts bitcoins are sent to can be a difficult task.

"The addresses you're sending to, they don't have names attached to them. Much like your gmail account could be fluffybunny@gmail.com, it doesn't have your name ... It's pseudonymous," Bursey explained.

Bursey said while there's nothing to stop people from creating as many accounts as they want, if the same account used by a scammer includes any personal information, such as details from an online transaction like Amazon, that gives investigators a lead to pin down the fraudster.

According to Bursey, awareness is the best defence.

"Like anything, do your due diligence," Bursey said.

"Think it through, and you know what? Google it."

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