Investor Alert:
CIRO is warning investors about a fraud scheme where fraudsters, linked to a company called TopFirstGroup, falsely claim that IIROC and CIRO require investors to make border fee payments to release funds held at a financial institution under CIRO’s name.
Canadians should be aware of the threat of sophisticated scams involving prolonged communications and relationships built through social media, dating apps and websites, and through text messages.
A joint news release from the Canadian Anti-Fraud Centre (CAFC) and the Canadian Investment Regulatory Organization (CIRO) outlines how these scammers exploit popular interest in cryptocurrency.
According to the CAFC, there has been an increase in romance scams. These scammers prey on individuals seeking human connection online. In these scams, victims are contacted on dating apps and websites or via social media. Fraudsters befriend their future victims, build a relationship to gain trust and sometimes even develop an online romance.
Eventually, the scammers share their own success with crypto investment and offer to help their “friend” get rich. Promising outsized returns, with little or no risk, fraudsters lure victims into a “get rich quick” scheme, getting them to transfer money to fake online trading platforms, often resulting in the victim being unable to withdraw funds. Once a substantial amount of money or crypto has been sent, the scammer abruptly ceases contact.
In some cases—in a further layer of the scam—the scammer agrees to return the funds but demands additional funds for supposed taxes and fees before then disappearing. Victims are sometimes also approached by new entities offering to help recover the lost funds for a fee. These recovery scams are yet another level of sophistication to these scams—preying on victims at a vulnerable time as they try to recover the initial losses.
In recent years, cryptocurrency and non-fungible tokens (NFTs) have captured the imaginations of innocent and knowing investors alike. CIRO monitors crypto trading in the CIRO approved Crypto Trading Platforms (CTPs) and encourages all crypto investors to consult the list of CTPs that are authorized to do business with Canadian investors. All individuals registered to offer financial advice in Canada are listed on the National Registration Search of the Canadian Securities Administrators (CSA).
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