Rise in Crypto Scams on Dating Platforms Alarms Canadians; Implementation of Crypto-Asset Reporting Framework Anticipated
Summary:
Cryptocurrency scams on dating and social platforms are on a rise this summer in Canada, specifically 'pig butchering' or romance scams, and investment scams. CAFC and CIRO have warned Canadians to be cautious of individuals discussing cryptocurrency trading or investments. In 2023, Canadians experienced a loss of $309.4 million due to investment scams, prompting the introduction of the Crypto-Asset Reporting Framework (CARF) for taxation by 2026.
In their quest for love online, many Canadians are falling prey to cryptocurrency scammers active on various dating and social platforms this summer. The Canadian Anti-Fraud Centre (CAFC) has witnessed an upswing in certain types of digital currency scams, notably 'pig-butchering' or romance scams, and investment scams. The CAFC, in collaboration with the Canadian Investment Regulatory Organization (CIRO), issued an advisory warning about these elaborate scams, with a particular emphasis on scams involving extensive online interactions.
Typically, the scammers initiate contact with potential victims through dating websites and coax them to shift their conversation to a more private form of communication. Canadians have been cautioned against individuals engaging in talk about cryptocurrency trading or investments.
The tricksters usually attempt to establish a connection with the victim, which can range from friendship to romantic involvement. They may even assume the guise of credible investment advisors. Gradually, they may propose investment opportunities, predominantly related to digital currencies, to their victims.
The victims often find themselves entangled in deceptive crypto investment schemes that promise extravagant returns. They are lured to enroll on fake investment platforms engineered by the fraudsters where they are subsequently defrauded. The scammers gain control of their funds and subsequently deny access once the victims' identity has been compromised.
However, in the beginning stages, victims are typically permitted to make small withdrawals to maintain the illusion of authenticity.
Acts of fraud should be promptly reported to CIRO, CAFC, and the local law enforcement agency. In 2023, Canadians suffered a loss of $309.4 million due to identified investment scams, establishing it as the most prevalent scam that year. Out of the total losses, $172 million were caused by frauds originating from social media platforms.
Related: Legal proceedings against Binance for breaking securities law in Canada
In terms of regulating cryptocurrency, Canada plans to implement the international Crypto-Asset Reporting Framework (CARF) for taxation purposes by 2026, as detailed in an addendum to their 2024 annual fiscal plan. This framework will lay new reporting obligations on crypto asset service providers (CASPs)—individuals or companies involved in operating cryptocurrency exchanges, dealing in crypto assets, or managing crypto-asset automated teller machines. Cryptocurrencies such as "stablecoins, derivatives issued in crypto-asset form, and certain nonfungible tokens" will be included in this categorization.
The framework mandates CASPs to gather and report detail about their clientele—names, addresses, birthdates, places of residence, and tax identification numbers for each residential jurisdiction.
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Published At
5/29/2024 11:45:40 AM
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