The Nova Scotia Securities Commission is issuing an urgent warning about a widespread scam after numerous Nova Scotians – and other Canadians and U.S. residents – were victimized, suffering substantial losses, including individual losses of hundreds of thousands of dollars.
The scam is often referred to as a “pig butchering” scheme and typically proceeds as follows:
The scammers not only gain access to the victim’s deposited funds through the crypto account, but instruct the victim to download trading apps or file-sharing software that give the scammer access to the victim’s mobile device or computer to obtain personal and financial information they can use to steal more money. The scammer may also sell this information to other scammers, who will try to further exploit the victim.
After losing money through the scam, the victim is often contacted again by the scammer posing as someone who can get the lost money back for a fee, known as a recovery scam. Victims of this type of scam are unlikely to recover their money. People should resist responding to unsolicited requests or ads asking for more money to recover losses.
The technologies used by scammers seldom leave a trail, and even if they can be identified, they are usually located outside Canada and the U.S., so beyond of the reach of Canadian and U.S. securities regulators.
While the commission is interested in receiving reports of losses by crypto investors from these scams, from experience, there typically is little that can be done to recover these funds. Recognizing and avoiding such scams is the only real protection for investors.
Important information and advice for people considering trading in crypto assets:While there are always fraudsters inventing new schemes, these so-called ‘pig butchering’ scams involving crypto assets have become very prevalent and are claiming many victims, many with very large losses. Everyone should be very wary for themselves and their friends and family members of unsolicited messages or advertisements recommending investment in crypto assets. Regulators in North America believe more than $1 billion has been lost to crypto scammers since 2021 and that amount only continues to increase. Canadians who wish to trade crypto assets should do so only through Canadian-registered crypto trading platforms or dealers.
Paul Radford, Chair, Nova Scotia Securities Commission
To file a complaint or report a scam to the Nova Scotia Securities Commission: https://nssc.novascotia.ca/recognize-and-report-scam
List of crypto trading platforms registered in Nova Scotia: https://nssc.novascotia.ca/registered-crypto-asset-trading-platforms
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