- AI-driven crypto scams are rising in Canada.
- Canadians lost $640M to fraud in 2024.
- Stricter crypto rules aim to protect investors.
The Ontario Securities Commission (OSC) says crypto related fraud is running rampant across Canada, and scammers are increasingly using some artificial intelligence tools to trick unsuspecting investors.
The country’s top securities regulator has warned that fraudulent sophisticated cryptocurrency scams are growing too rapidly. With the help of cutting edge AI technologies, such as deepfakes, counterfeit trading platforms, and social bots, fraudsters can now manipulate the victims into revealing their funds.
Canada Reports $640 Million Fraud Losses
Grant Vingoe, the CEO of the OSC, spoke during an annual event on Thursday, saying financial misconduct has become concerning. “It’s an environment where you have more scams, more fraud, more insider trading, more corruption,” Vingoe was reported as telling The Globe and Mail. He attributed the surge to a broader failure of traditional financial norms, driven by an environment of instability worldwide.
Vingoe added that the geopolitical environment is unpredictable which creates an atmosphere where there is fertile ground for the presence of people with malicious intent. The Canadian Anti-Fraud Centre provides data showing the significant problem – in 2024, Canadians reported losses totalling almost $640 million due to fraud schemes.
In reaction to the growing threat, the OSC’s executive vice president, enforcement, Bonnie Lysyk, stated that the regulator is to focus on ‘high impact cases’. She also called for proactive measures to “ensure that the population of bad actors is disrupted even earlier” after concluding that the crypto sector was ripe for fraud.
CSA Requires Pre-Registration for Crypto Platforms
In February 2023, the rules Canada enacted on cryptocurrency operations began to tighten. Under the new regulations from the Canadian Securities Administrators (CSA), crypto trading platforms working in Canada have to sign a legally binding pre-registration undertaking. Previously, the ban on margin trading for Canadian users was added to this regulatory panoply.
Additionally, the CSA has classified some stablecoins as securities or derivatives, thus forcing exchanges to reverse their decision to offer such digital assets via contractual arrangements unless they approve. Because of this regulatory stance, many crypto platforms trying to do business in the Canadian market have encountered serious compliance challenges.
