The Canadian Anti-Fraud Centre (CAFC) has issued a warning about an increase in crypto scams targeting Canadian citizens. There has been a surge in two specific types of cryptocurrency scams, including pig butchering or romance scams, and investment scams. To address this issue, the CAFC, in collaboration with the Canadian Investment Regulatory Organization (CIRO), has raised awareness about these sophisticated scams, particularly those involving prolonged online communication. Canadian citizens are advised to be cautious when engaging with individuals discussing cryptocurrency trading or investments. Fraudsters often establish online friendships or romances to propose investment opportunities involving crypto assets.
Victims of crypto investment schemes are often promised unrealistic returns by scammers who create fraudulent investment platforms. Once victims sign up and their identity is compromised, scammers lock their invested funds, leaving victims unable to access their money. Despite allowing victims to withdraw small amounts initially to appear legitimate, scammers ultimately disappear with the stolen funds. Canadians are encouraged to report any instances of fraud to the CIRO, CAFC, and local law enforcement agencies promptly. Timely reporting can help authorities track and combat these scams effectively and protect more citizens from falling victim to these schemes.
In 2023, Canadians lost a staggering $309.4 million to investment frauds, making it the most common type of scam that year. Social media-related frauds accounted for $172 million of that total amount. As part of the 2024 annual budget, Canada plans to adopt the international Crypto-Asset Reporting Framework (CARF) by 2026 for taxation purposes. This framework will introduce new reporting requirements for crypto asset service providers, including cryptocurrency exchanges, brokers, dealers, and automated teller machine operators, whether they are individuals or businesses.
Crypto romance scams have also been prevalent in the US, causing significant financial losses to victims. A recent case involved a 37-year-old tech professional from Philadelphia who lost $450,000 to a cryptocurrency romance scam. In Santa Clara, California, the Deputy District Attorney receives numerous emails daily from victims of pig butchering scams, with losses ranging from thousands to millions of dollars. Stolen funds from these scams are often funneled overseas to transnational criminal organizations in countries like Myanmar and Cambodia, using trafficked individuals as virtual slaves to carry out the scams.
In response to the rise in crypto scams, experts provide insights on pig butchering scams in a recent podcast episode. The podcast delves into the details of this scam typology to help educate individuals about the risks associated with these fraudulent schemes. By raising awareness and providing information on common crypto scams, more people can be informed and vigilant when engaging in online activities involving cryptocurrencies. It is crucial for individuals to exercise caution, conduct thorough research, and report any suspicious activities to the appropriate authorities to protect themselves and others from falling victim to these scams.
