Romance and Investment Scams on the Rise

As summer heats up, so does the activity of crypto scammers on Canadian dating apps and websites.

The Canadian Anti-Fraud Centre (CAFC) has reported a troubling rise in romance and investment scams, also known as 'pig butchering,' targeting individuals on dating platforms. These schemes involve sophisticated tactics that leverage cryptocurrencies.

According to the announcement, scammers begin these deceptions by forming connections on popular dating sites. They quickly shift conversations to private messaging services to isolate their victims.

The Deceptive Process

As relationships ostensibly deepen, these malicious actors introduce the idea of lucrative digital currency investments. They exploit the trust built over time to encourage financial commitments.

Once the trap is set, victims are persuaded to invest in high-return digital currency schemes on platforms that are nothing more than sophisticated facades.

These platforms often allow victims to withdraw initially, fostering a false sense of security and functionality.

However, when more significant sums are invested, access to funds is suddenly restricted or entirely blocked, with the scammers vanishing or the platforms shutting down, leaving the investors with substantial losses.

Personal information handed over during the investment process further compounds the risk, leading to potential identity theft or additional fraudulent activities under the victim's name.

Joint Efforts to Combat Scams

Recognizing the severity of these crimes, the Canadian Investment Regulatory Organization (CIRO) has joined forces with the CAFC to combat fraudulent activities.

They have issued joint warnings to the public, emphasizing the importance of vigilance when approaching investment opportunities through new or unverified contacts, particularly those involving digital currency.

Both organizations encourage anyone who encounters or suspects such schemes to report them immediately to the authorities.

That helps to prevent further victimization and assists in tracking down those responsible for these exploitative practices.

Growing Cryptocurrency Adoption

This surge in fraudulent activity occurs against the backdrop of growing cryptocurrency adoption in Canada, particularly among institutional investors.

A recent survey by KPMG in Canada and the Canadian Association of Alternative Assets and Strategies (CAASA) highlighted a notable increase in institutional engagement with cryptocurrencies.

From 2021 to 2023, the percentage of institutional investors with crypto assets rose from 31% to 39%.

One-third of these institutions have allocated at least 10% of their portfolios to cryptocurrencies, reflecting a robust belief in the asset class's long-term potential.

Expanding Crypto Services

The interest in digital currency has spurred Canadian financial institutions to expand their crypto-related services.

According to the survey, half of the financial organizations now offer at least one crypto service, up from 41% two years ago. These services range from trading platforms and custody solutions to quantitative trading strategies designed for the digital currency market.