Scammers Use AI Deepfakes and Fake Trading Platforms

Cryptocurrency-based fraud is booming in Canada, where scammers are increasingly using sophisticated AI tools like deepfakes to trick investors. The Ontario Securities Commission (OSC) has warned that the trend makes it harder to identify scams as fake trading platforms and online impersonations are on the rise.

CEO Grant Vingoe, speaking at the OSC’s annual conference, said that today the business environment is marked by higher rates of fraud, insider trading, and corruption. He attributed the rise in criminal activity to the decline of the traditional standards and ambiguity of the international geopolitics.

Losses Near $640 Million in 2024

According to data from the Canadian Anti-Fraud Centre, Canadians reported almost $640 million in losses due to fraud in 2024 alone. Vingoe noted that geopolitical uncertainty creates a climate where fraudsters can thrive, taking advantage of economic uncertainty and public fear.

OSC enforcement executive vice-president Bonnie Lysyk mentioned the commission is going to prioritize “high-impact cases” and implement new strategies to tear down scams earlier, especially since the crypto space remains largely vulnerable to bogus schemes.

Hiking Regulations for Crypto Platforms

In response to rising threats, Canada began tightening cryptocurrency regulations in February 2023. The Canadian Securities Administrators (CSA) now require crypto trading platforms operating in Canada to make legally binding pre-registration commitments.

Also, the CSA’s classification of some stablecoins as securities or derivatives has caused restrictions on stablecoin provision without advance approval to skyrocket compliance demands for crypto exchanges operating in Canada.