Romance and Crypto Scams Spike on Canadian Dating Apps

This summer, scam artists are aggressively targeting Canadians on dating apps and websites, aiming to exploit those looking for love. Many unsuspecting individuals are falling victim to these schemes, leading to significant financial losses. The Canadian Anti-Fraud Centre (CAFC) has observed a rise in two specific types of cryptocurrency-related frauds targeting Canadians: romance scams, often referred to as “pig butchering,” and investment scams.

In collaboration with the Canadian Investment Regulatory Organization (CIRO), the CAFC has issued warnings about these elaborate scams, especially those that involve prolonged online interactions. Scammers typically initiate contact on dating apps and then persuade their targets to switch to private messaging services, making their schemes more personal and convincing.

The authorities have cautioned Canadians to be wary of anyone they meet online who starts discussing cryptocurrency trading or investments. These fraudsters might try to build a relationship, either romantic or platonic, or might even pose as credible investment advisors. Gradually, they introduce an investment opportunity, which often revolves around cryptocurrency assets.

Victims are lured into crypto investment schemes that promise extraordinarily high returns. They are directed to sign up on phony investment platforms created by the scammers. Initially, these platforms allow victims to withdraw small amounts of their investments to build trust. Once personal and financial information is compromised, the victims find themselves locked out of their investments, which are virtually impossible to recover.

The CAFC and CIRO urge Canadians to report any instances of such fraud to the appropriate authorities, including the local police. In 2023 alone, Canadians suffered financial losses amounting to $309.4 million due to various investment frauds, with social media-related frauds accounting for $172 million of this total.

The Canadian government plans to implement the international Crypto-Asset Reporting Framework (CARF) for taxation purposes by 2026. This initiative is highlighted in a supplement to the 2024 annual budget. The CARF will introduce new reporting requirements for crypto asset service providers, including cryptocurrency exchanges, brokers, dealers, and ATM operators, regardless of whether they are individuals or businesses.

The supplemental report elaborates that the CARF will cover a range of crypto assets, including stablecoins, derivatives issued as crypto assets, and certain non-fungible tokens (NFTs). Crypto-asset service providers will be mandated to collect and report detailed information about their customers. This includes names, addresses, dates of birth, jurisdictions of residence, and taxpayer identification numbers for each jurisdiction.

By introducing these measures, Canada aims to enhance the transparency and accountability of crypto asset transactions and reduce the potential for future scams. This upcoming regulation emphasizes the importance of cautious and informed participation in the rapidly evolving world of cryptocurrency.