Crypto-related fraud is booming in Canada as scammers increasingly use AI tools to target investors, the Ontario Securities Commission says.
Canada‘s top securities watchdog is sounding the alarm on a wave of crypto scams, saying fraudsters are now using slick artificial intelligence deepfakes and fake trading platforms to fool investors and steal their money.
During the annual event on Thursday, Grant Vingoe, the chief executive officer of the Ontario Securities Commission, said the country is now in an environment “where there’s more scams, more fraud, more insider trading, more corruption, enabled by an atmosphere in which anything goes and the traditional norms are not being observed as they have in the past,” The Globe and Mail reports.
Vingoe linked the rise in fraud to wider instability as the “unpredictability of the geopolitical environment leads to an environment where people who are interested in doing wrong will find a place.” In 2024 alone, victims reported nearly $640 million in losses, per data from the Canadian Anti-Fraud Centre.
Now, Bonnie Lysyk, the OSC’s executive vice-president of enforcement, says the Commission wants to focus on “high-impact cases,” adding the Commission wants to “put in place additional strategies to disrupt those who harm investors earlier” as the crypto space “is ripe for fraud.”
Canada began tightening crypto-related regulations in February 2023 when the Canadian Securities Administrators required all crypto trading platforms operating in the country to sign legally binding pre-registration undertakings. This came on top of existing restrictions, including the prohibition on offering margin trading to Canadian users.
Since the CSA considers some stablecoins to be securities or derivatives, exchanges were also prohibited from offering stablecoins or value-referenced crypto through contracts without prior approval, making it challenging for many crypto platforms to comply.