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Increase in Crypto and Romance Scams on Canadian Dating Platforms

ByDayne Lee

May 31, 2024
Increase in Crypto and Romance Scams on Canadian Dating Platforms

Increase in Crypto and Romance Scams on Canadian Dating Platforms

As summer approaches, Canadian dating platforms are becoming hotspots for crypto scammers, targeting users seeking romantic connections. These scammers are luring unsuspecting individuals into costly traps, causing significant financial losses across the country.

Rise in Crypto Scams via Dating Apps

The Canadian Anti-Fraud Centre (CAFC), in collaboration with the Canadian Investment Regulatory Organization (CIRO), has noted a surge in crypto-related scams, specifically targeting Canadians through dating apps and websites. Two predominant scam types have been identified: pig butchering (romance scams) and investment scams, both involving cryptocurrencies.

Scammers typically initiate contact on dating platforms and soon suggest moving conversations to private messaging services. Posing as potential romantic partners or legitimate investment advisers, they build trust over time. Their ultimate goal is to convince their victims to invest in fraudulent crypto opportunities promising high returns.

Detailed Scam Tactics

Victims are enticed into transferring funds to fake investment platforms, where they are initially allowed to withdraw small amounts to portray legitimacy. Over time, as trust builds, larger amounts are solicited, and eventually, access to the funds is completely restricted once the scammers achieve their objectives.

CIRO and CAFC have issued warnings urging Canadians to be vigilant, especially towards individuals on dating sites who quickly steer conversations towards crypto trading or investments. The authorities encourage reporting any suspicious interactions to help curb these fraudulent activities.

In 2023, Canadians were defrauded of $309.4 million through various investment scams, marking them as the most prevalent type of fraud for the year. Social media-related frauds accounted for $172 million of these losses, highlighting the significant role digital platforms play in modern scamming techniques.

Upcoming Regulatory Changes

In response to these rising threats and the growing integration of crypto assets into financial activities, Canada plans to implement the international Crypto-Asset Reporting Framework (CARF) by 2026. This framework is designed to enhance the oversight of crypto transactions and improve the transparency of digital asset movements.

Crypto-asset service providers (CASPs), including cryptocurrency exchanges, brokers, dealers, and ATM operators, will be required to adhere to stringent reporting standards. They must collect and disclose comprehensive customer information, such as names, addresses, dates of birth, residence jurisdictions, and taxpayer identification numbers.

The framework will cover various crypto assets, including stablecoins, derivatives in crypto-form, and specific non-fungible tokens (NFTs). This inclusive approach ensures a broad regulatory net to prevent the misuse of digital currencies for fraudulent purposes.

Key AspectDetail
Total Loss in 2023$309.4 million to investment frauds
Loss from Social Media Scams$172 million
CARF Implementation Year2026
Entities Affected by CARFCASPs: Exchanges, Brokers, Dealers, ATM Operators

The increasing prevalence of romance and crypto scams in Canada calls for heightened vigilance and proactive reporting of suspicious activities. With the impending implementation of CARF, Canadian authorities aim to fortify the defenses against financial crimes facilitated through emerging digital platforms. As individuals become more aware and regulatory frameworks become stricter, the hope is to significantly reduce the impact of these financially damaging schemes.

Featured image credit: stockerthings via Vecteezy

Dayne Lee

With a foundation in financial day trading, I transitioned to my current role as an editor, where I prioritize accuracy and reader engagement in our content. I excel in collaborating with writers to ensure top-quality news coverage. This shift from finance to journalism has been both challenging and rewarding, driving my commitment to editorial excellence.

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