Scammers in the cryptocurrency world are making desperate attempts to target Canadians through dating apps and websites this summer. Unfortunately, many unsuspecting individuals are falling victim to these scams and paying a significant price.
The Canadian Anti-Fraud Centre (CAFC) has identified two specific types of crypto scams that are prevalent among Canadian citizens: romance scams, also known as pig butchering, and investment scams. In response to this growing issue, the CAFC and the Canadian Investment Regulatory Organization (CIRO) have issued a joint warning about these sophisticated scams, especially those involving extensive online communication.
Scammers often engage with potential victims on dating platforms and then persuade them to switch to private messaging services. Canadian authorities have cautioned individuals to be cautious of anyone discussing crypto trading or investments.
Typically, victims are presented with crypto investment schemes that promise unrealistic returns. They are then encouraged to sign up on fraudulent investment platforms created by scammers. Once the scammers gain access to the victims’ personal information, their invested funds are locked away, leaving the victims in a helpless situation.
However, scammers initially allow victims to withdraw small amounts of money to maintain the illusion of legitimacy.
It is crucial for Canadians to report any instances of fraud to the CIRO, CAFC, and local law enforcement.
In 2023, Canadians suffered losses of $309.4 million due to known investment frauds, making it the most common type of scam that year. Social media-related frauds alone accounted for $172 million of these losses.
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Canada plans to implement the international Crypto-Asset Reporting Framework (CARF) for taxation purposes by 2026, according to the 2024 annual budget supplement.
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.
The supplement report specifically highlights stablecoins, crypto-asset derivatives, and certain non-fungible tokens as examples of crypto assets.
According to the report, “Crypto-asset service providers will be obligated to obtain and report information on each customer, including their name, address, date of birth, jurisdiction(s) of residence, and taxpayer identification numbers for each jurisdiction of residence.”
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