Crypto-related fraud is booming across Canada, with scammers deploying increasingly sophisticated artificial intelligence tools to deceive investors, according to the Ontario Securities Commission (OSC).
During an annual event on Thursday, Grant Vingoe, CEO of the OSC, raised urgent concerns about the escalating wave of crypto scams. Speaking to attendees, Vingoe highlighted that fraudsters are now leveraging AI-generated deepfakes and fake trading platforms to dupe victims and siphon off millions in funds.
“We’re in an environment where there’s more scams, more fraud, more insider trading, more corruption,” Vingoe said, as reported by The Globe and Mail. He emphasized that the “unpredictability of the geopolitical environment” has created fertile ground for bad actors to operate, eroding traditional norms and investor protections.
The impact is staggering. In 2024 alone, Canadian victims have reported nearly $640 million in losses, according to data from the Canadian Anti-Fraud Centre.
Bonnie Lysyk, the OSC’s executive vice-president of enforcement, echoed Vingoe’s concerns. She announced that the Commission plans to prioritize “high-impact cases” and develop new strategies to “disrupt those who harm investors earlier,” given that the crypto space “is ripe for fraud.”
The OSC’s warnings come as Canada continues tightening its regulatory framework for crypto trading. In February 2023, the Canadian Securities Administrators (CSA) mandated that all crypto platforms operating within Canada must sign legally binding pre-registration undertakings. These rules built upon earlier restrictions, such as banning margin trading for Canadian users.
Further complicating compliance, the CSA also classified some stablecoins as securities or derivatives, meaning platforms could not offer them without prior regulatory approval. This has created significant hurdles for crypto exchanges operating in the country.
As the global geopolitical environment grows increasingly volatile, Canadian regulators are signaling a tougher stance on crypto-related fraud to protect investors from increasingly tech-savvy criminals.
