Canada Issues Warning About Increasing Pig Butchering and Crypto Investment Scams
The Canadian Anti-Fraud Centre (CAFC) has raised concerns about a surge in crypto scams that are specifically targeting Canadian citizens. In an announcement made on Tuesday, the anti-fraud call centre highlighted two types of cryptocurrency scams that have been on the rise in Canada: pig butchering or romance scams, and investment scams.
To address this alarming trend, the CAFC has collaborated with the Canadian Investment Regulatory Organization (CIRO) to issue a warning and raise awareness about these sophisticated scams, particularly those involving prolonged online communication.
The CAFC and CIRO have advised citizens to be cautious when engaging with individuals who discuss cryptocurrency trading or investments. The warning states that fraudsters may try to establish a friendship or develop an online romance, or pose as legitimate investment advisors. Eventually, the scammer will propose an investment opportunity, often involving crypto assets.
The scams frequently promise unrealistic returns on crypto investments. Scammers create fake investment platforms and persuade victims to sign up. Once the victim’s identity is compromised, the scammers lock their invested funds, leaving them unable to access their money. However, in the beginning 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. Prompt reporting of such incidents helps authorities effectively track and combat these scams.
In 2023, Canadians fell victim to investment frauds totaling 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 have also become prevalent, affecting US citizens and resulting in significant financial losses. One recent victim, Shreya Datta, a 37-year-old tech professional from Philadelphia, fell victim to a cryptocurrency romance scam that left her financially ruined with losses amounting to $450,000.
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. 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.