Canada Issues Warning on Surge in Pig Butchering and Crypto Investment Scams
The Canadian Anti-Fraud Centre (CAFC) has raised concerns about an increase in crypto scams targeting Canadian citizens. In a statement released on Tuesday, the anti-fraud call centre highlighted two specific types of cryptocurrency scams affecting Canadians: pig butchering or romance scams, and investment scams.
To address this worrying trend, the CAFC has collaborated with the Canadian Investment Regulatory Organization (CIRO) to issue a warning and raise public awareness about these sophisticated scams, especially those involving prolonged online communication.
The CAFC and CIRO cautioned citizens to exercise caution when engaging with individuals discussing cryptocurrency trading or investments. “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 stated.
Victims of these scams are often presented with crypto investment schemes promising unrealistic returns. Scammers create fraudulent 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 initial stages, victims are allowed to withdraw small amounts to create the illusion 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 fraud, resulting in losses amounting to a staggering $309.4 million, making it the most prevalent type of scam that year. Social media-related fraud 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 in the United States, resulting in significant financial losses. Recently, a tech professional from Philadelphia fell victim to a cryptocurrency romance scam, suffering losses of $450,000. Authorities have revealed that they receive a daily average of 5-6 emails from individuals who have fallen prey to pig butchering scams.
Compounding the issue, the stolen funds are funneled overseas to transnational criminal organizations in Myanmar and Cambodia, utilizing trafficked individuals as virtual slaves to carry out the pig butchering scams.
