B.C. financial regulator, other agencies join warning about 'pig butchering' investment scams

A phone and representations of cryptocurrencies are seen in this file photo.

The B.C. Securities Commission is the latest agency to warn provincial residents about so-called "pig butchering" 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 who start recommending crypto investments." 

In the warning, the BCSC and several other organizations – including the BC RCMP Financial Integrity Program, Burnaby RCMP, the Canadian Anti-Fraud Centre (CAFC), the United States Secret Service and the Vancouver Police Department – describe scams similar to those that have cost victims in Richmond and Surrey a collective $31 million or more since the start of 2023.

"These long cons employ social manipulation and financial grooming tactics to exploit the public’s interest in – and incomplete understanding of – crypto assets, luring victims into handing over more and more money," the joint statement reads.

"The method has come to be known as 'pig butchering' because it’s akin to fattening a pig before slaughter."

According to the statement, B.C. residents reported losses from online investment scams totalling $46.4 million to the CAFC in 2023, "with most of those losses involving crypto."

A further $1.3 million in losses was reported in the first seven weeks of 2024, but only an estimated five per cent of victims report their experiences, according to the CAFC.

Pig butchering scams often begin with an unsolicited message on social media, a dating website or a messaging app, with the scammer pretending that the message was intended for someone else.

"They may try to befriend the victim, develop an online romance with them or pretend to be legitimate investment advisers," the joint statement reads.

"Regardless of the specific method, the perpetrators develop relationships with the victims, often over a period of weeks or months."

Once the fraudster has built a rapport with the victim, they'll recommend an investment opportunity, often involving crypto assets, according to the BCSC.

After the victim has "invested" a substantial amount of money or crypto, the scammer will abruptly cut off contact.

"After the loss becomes apparent, the victims are often approached by a new person or organization who offers to help recoup 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 B.C. have lost more than $1 million to such scams.

The joint statement lists four "red flags of long-term investment fraud and financial grooming."

These include "random overtures from strangers" that lead to weeks- or months-long exchanges; the promise of easy money made via "inside" information, professional traders or proprietary algorithms; crypto websites that seem legitimate and look similar to well-known financial institutions; and the sharing of false financial records that show returns to provide a sense of reassurance and legitimacy.

For more information, the warning can be found on the BCSC website.