CIRO and CAFC warn of rising scam threats

Canadians warned of sophisticated scams involving online communication and cryptocurrency investments

CIRO and CAFC warn of rising scam threats

The Canadian Investment Regulatory Organization (CIRO) and the Canadian Anti-Fraud Centre (CAFC) are alerting Canadians to the rising threat of sophisticated scams, particularly those involving prolonged online communication.

These scams often persuade individuals to invest in various schemes, frequently involving cryptocurrencies.

Scammers use social manipulation and financial grooming to exploit the public's interest in and incomplete understanding of crypto assets. Victims are lured into transferring increasing amounts of money, with promises of “get rich quick” opportunities and higher than normal returns.

These frauds often result in significant financial losses.

The CAFC has also observed an increase in romance/investment scams, known as “pig butchering.” Fraudsters contact victims on dating apps, websites, or social media, developing a relationship to gain trust. They claim success in cryptocurrency investments and offer to help the victim “get rich.”

Using fake online trading platforms, they convince victims to transfer funds or cryptocurrency, often leaving them unable to withdraw their money.

Scammers may pose as friends, romantic partners, or legitimate investment advisers. They suggest investing in opportunities involving crypto assets and disappear once a substantial amount of money is sent.

In some cases, when victims request their money back, scammers demand additional funds for supposed taxes and fees before vanishing. New entities may also approach victims, offering to recover their funds for a fee, adding another layer of fraud.

Red flags to watch for include unsolicited messages from strangers on social media, dating apps, and text messages leading to prolonged exchanges, often moving to private messaging apps.

Scammers may mention easy money made in the crypto market, based on exclusive information or “professional traders.” They may encourage visits to crypto-related websites, which appear legitimate and use terms like “investment packages” and “guaranteed rates of return.”

They may also provide financial records showing returns or allow a small withdrawal to create a false sense of legitimacy.

Canadians can protect themselves by being cautious of unsolicited messages on social media or “wrong number” texts, especially if the sender tries to develop a bond. Avoid investing based solely on advice from someone met online and consult with registered financial professionals if needed.

Be skeptical of promises of large, quick, and low risk returns. Report suspected investment fraud to the CIRO, CAFC, and local police.

Stay informed and cautious to avoid falling victim to investment frauds and romance scams. Regularly visit the CAFC and CIRO websites for more tips and information.

If you believe you have been a victim of a scam, immediately contact your bank, local police, provincial or territorial securities commission, and the CAFC.