The BC Securities Commission is the latest agency to warn provincial residents about so-called “pig butcher” investment scams.
Following reports of multimillion-dollar losses shared by RCMP detachments in Surrey and Richmond this month, the BCSC issued a statement Wednesday titled “Joint Investor Alert: Beware of Online Connections That Start Recommending Cryptocurrency Investments“.
In the warning, the BCSC and several other organizations, including the BC RCMP Financial Integrity Program, the Burnaby RCMP, the Canadian Anti-Fraud Center (CAFC), the United States Secret Service and the Vancouver Police Department , describe scams similar to those that have occurred cost victims in Richmond and Surrey a total of $31 million or more since early 2023.
“These long-running scams employ social manipulation and financial grooming tactics to exploit the public’s interest in (and incomplete understanding of) cryptoassets, luring victims to hand over more and more money,” the joint statement reads.
“The method has become known as ‘pig slaughter’ because it is similar to fattening a pig before slaughter.”
According to the release, British Columbia residents reported losses from online investment scams totaling $46.4 million to the CAFC in 2023, “and the majority of those losses involved cryptocurrency.”
Additional losses of $1.3 million were reported in the first seven weeks of 2024, but only an estimated five percent of victims are reporting their experiences, according to the CAFC.
Pig slaughter scams often start with an unsolicited message on social media, a dating website, or a messaging app, in which the scammer pretends the message was intended for someone else.
“They may attempt to befriend the victim, develop an online romance with them, or pretend to be legitimate investment advisors,” the joint statement reads.
“Regardless of the specific method, perpetrators develop relationships with victims, often over a period of weeks or months.”
Once the scammer has established a relationship with the victim, they will recommend an investment opportunity, often involving crypto assets, according to the BCSC.
After the victim has “invested” a substantial amount of money or cryptocurrency, the scammer will abruptly cut off contact.
“Once the loss becomes apparent, victims are often contacted by a new person or organization who offers to help recover their funds in exchange for a recovery fee,” the statement reads. “These offers are also fraudulent.”
The BCSC says the perpetrators of these scams are often criminal gangs based in other countries, and some individual victims in BC have lost more than $1 million in such scams.
The joint statement lists four “red flags of investment fraud and long-term financial preparedness.”
These include “random advances from strangers” that lead to exchanges that last weeks or months; the promise of easy money earned through “insider” information, professional traders, or proprietary algorithms; crypto websites that look legitimate and resemble well-known financial institutions; and sharing false financial records showing returns to provide a sense of comfort and legitimacy.
For more information, you can find the warning. on the BCSC website.