Fraudsmen marry crypto scams with online dating, authorities warn

Increasingly, fraudsters are using social media and dating apps to carry off crypto investment scams, regulators and law enforcement in British Columbia are warning.

The British Columbia Securities Commission (BCSC) joined with the RCMP in the province, municipal police and the Canadian Anti-Fraud Centre (CAFC) in warning about the emergence of new investment scam tactics.

“Fraudsters are adapting their techniques to the latest trends and technologies,” the warning said, noting that this includes targeting victims on dating apps and other social media sites, researching victims through their online posts, and impersonating victims’ friends online to lure them into these scams.

These new tactics are paying off. According to the warning, investors in B.C. reported that they lost $3.5 million to crypto scams in the first eight months of 2021, which is up from just over $1 million in the previous year. The actual total is likely much larger, as it’s estimated that only about 5% of fraud victims report these kinds of scams to authorities.

“Fraudsters use social media and dating apps to manipulate people looking to make meaningful connections, exploit their victims’ trust, and then defraud them of significant amounts of money,” said Doug Muir, director of enforcement at the BCSC, in a release.

“Be extremely wary if you are contacted out of the blue or promised high returns that sound too good to be true. Always research the investment and the person selling it before you invest,” he said.

The CAFC said the surge in crypto fraud is expected to continue in the years ahead.

“Every year, thousands of Canadians fall victim to fraud. Most don’t think it could happen to them, but fraudsters are using increasingly sophisticated ways to target people of all ages, as can be seen with the crypto investment scams. It is important for victims to know that they are not alone and that by reporting the crime they are helping themselves and others,” said Sergeant Guy Paul Larocque, officer in charge of the CAFC.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.