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30/05/24
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Canadian Regulatory Organizations Raise Awareness About Scams Related to Romance and Crypto
On May 28, the Canadian Anti-Fraud Centre (CAFC) and the Canadian Investment Regulatory Organization (CIRO) jointly issued a media statement to inform Canadians about the rise in the threat of sophisticated scams which usually involve crypto.
The scams involve extended online communication aimed at manipulating people using financial grooming tactics. Bad actors exploit people who are interested in crypto but do not completely understand crypto assets.
Victims are typically introduced to “get rich quick” opportunities which promise returns higher than normal. Fraudsters claim to have successfully invested in crypto and offer to help their victims get rich. Victims are convinced to transfer crypto or funds into their trading accounts on fake online trading platforms and withdrawal becomes impossible.
“The CAFC is also noticing an increase in romance/investment scams, a method colloquially known as “pig butchering”. Victims are contacted on dating apps/websites or social media by fraudsters attempting to develop a relationship to gain trust,” reads the media statement.
The governmental organizations noted that investment fraud losses valued at $309.4 million were recorded last year, while social media losses were worth $172 million. One of the approaches used by fraudsters is to befriend their victims, become romantic, or present themselves as legitimate investment advisers. They end up suggesting investing in an opportunity, usually related to crypto assets, and stop communicating once the victims send a significant amount of money or crypto.
The global Crypto-Asset Reporting Framework (CARF) is expected to be applied to taxation in Canada by 2026, as expressed in a supplement to the 2024 annual budget. Crypto asset service providers (CASPs) would be required to comply with new reporting requirements, including obtaining and reporting information on each of their customers.
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