Canadian authorities are warning the public about a surge in romance and cryptocurrency scams on dating apps and websites. They advise caution when discussing cryptocurrency investments with online matches, considering such conversations a red flag.
Increase in Crypto Scams
The Canadian Anti-Fraud Centre (CAFC) has observed a rise in two specific types of crypto scams targeting Canadians: romance scams, also known as “pig butchering,” and investment scams. These scams often involve prolonged online communication to build trust with victims.
Joint Warning from Authorities
The CAFC, along with the Canadian Investment Regulatory Organization (CIRO), issued a joint warning about these sophisticated scams. Scammers typically engage with potential victims on dating platforms, persuading them to continue conversations on private messaging services. Authorities caution Canadians to be wary of anyone discussing crypto trading or investments.
“Fraudsters may try to befriend the victim, develop an online romance, or pose as legitimate investment advisers,” the authorities noted. “Over time, the scammer will suggest investing in an opportunity, often involving crypto assets.”
Tactics and Impact
Victims are often lured into crypto investment schemes promising unrealistic returns. They are directed to bogus investment platforms where their funds are eventually locked out after their identity is compromised. Initially, victims may be allowed to withdraw small amounts to make the scheme appear legitimate.
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Reporting and Statistics
Canadians are urged to report such fraud incidents to CIRO, CAFC, and local police. In 2023, Canadians lost $309.4 million to known investment frauds, with $172 million stemming from social media-related scams alone.
Future Regulatory Measures
By 2026, Canada is expected to implement the international Crypto-Asset Reporting Framework (CARF) for taxation, as detailed in a supplement to the 2024 annual budget. The CARF will impose new reporting requirements on crypto asset service providers (CASPs), including cryptocurrency exchanges, brokers, dealers, and automated teller machine operators.
The supplemental report specified that “stablecoins, derivatives issued in the form of a crypto-asset, and certain nonfungible tokens” are considered crypto assets. CASPs will be required to collect and report customer information, including name, address, date of birth, jurisdictions of residence, and taxpayer identification numbers.
