- The Canadian Anti-Fraud Centre (CAFC) has issued a warning about a surge in cryptocurrency scams targeting Canadian citizens.
- These scams include pig butchering or romance scams and investment scams, often involving prolonged online communication.
- “Fraudsters may attempt to establish a friendship or develop an online romance, or they may pose as legitimate investment advisers. Over time, the scammer will propose an investment opportunity, often involving crypto assets,” the warning states.
Learn about the latest crypto scams targeting Canadians and how to protect yourself from falling victim.
Crypto Investment Schemes Promise Unrealistic Returns
Victims are frequently presented with crypto investment schemes promising unrealistic returns. Scammers create fraudulent investment platforms and coax victims into signing up. Once the victim’s identity is compromised, the scammers lock their invested funds, leaving them unable to access their money. However, in the initial stages, victims are allowed to withdraw small amounts to give the appearance of legitimacy. Canadian citizens are strongly urged to report any instances of fraud to the CIRO, CAFC, and local law enforcement agencies. The prompt reporting of such incidents helps authorities track and combat these scams effectively.
Expert Insights on Pig Butchering Scams in Crypto
In our latest podcast episode, we dissect this scam typology and break it down for you. Listen to the full podcast for a detailed analysis of how these scams operate and how to protect yourself. In 2023, Canadians fell victim to investment frauds amounting to a staggering $309.4 million, making it the most prevalent type of scam that year. Social media-related frauds alone accounted for $172 million of that total. As part of the 2024 annual budget, Canada plans to adopt the international Crypto-Asset Reporting Framework (CARF) by 2026, specifically for taxation purposes. The CARF will introduce new reporting requirements for crypto asset service providers (CASPs), including cryptocurrency exchanges, crypto-asset brokers and dealers, and crypto-asset automated teller machine operators, whether they are individuals or businesses.
Crypto Romance Scams Become Prevalent
Crypto romance scams have also been plaguing US citizens, resulting in significant financial losses. Just recently, Shreya Datta, a 37-year-old tech professional from Philadelphia, fell victim to a cryptocurrency romance scam that left her financially ruined with losses mounting to $450,000. As reported, Erin West, Deputy District Attorney in Santa Clara, California, has revealed that she receives an average of 5-6 emails daily from individuals who have fallen prey to pig butchering. “We are receiving 5-6 emails a day from people who are victims of pig butchering. The most recent victim lost $5 million dollars and that’s not even the biggest amount one victim has lost to this scam.” Compounding the issue, the stolen funds are funneled overseas to transnational criminal organizations in Myanmar and Cambodia, using trafficked individuals as virtual slaves to carry out the pig butchering scams.
Conclusion
In conclusion, the rise in crypto scams, including pig butchering and romance scams, is a significant concern for Canadian citizens. The CAFC and CIRO are urging individuals to exercise caution and report any suspicious activities. By staying informed and vigilant, Canadians can protect themselves from falling victim to these sophisticated scams. The adoption of the Crypto-Asset Reporting Framework (CARF) by 2026 is a step in the right direction to enhance transparency and accountability in the crypto space.
