Regulators are stepping up the fight against online fraud and scams by shutting down thousands of fake crypto platforms and websites that are believed to be orchestrating investment scams.
In a joint release Thursday, the Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) reported that between June 5 and Nov. 23 they’ve taken down more than 3,900 fake platforms and scam websites that utilized upwards of 6,900 web addresses.
Targeting online investment frauds at the source is increasingly a tactic used by securities regulators around the world.
In May, the International Organization of Securities Commissions called on internet platform providers to help combat online fraud by working with regulators, and conducting due diligence on users, to prevent bad actors from using their services to engage in fraudulent conduct and abuse investors.
Both the U.K.’s Financial Conduct Authority and the Australian Securities and Investments Commission have also reported active, ongoing efforts to take down websites and social media ads that are suspected of facilitating online frauds — and to get apps removed from their online stores by tech giants Google and Apple.
“Aided by advancements in technology, the number of scam investment websites has grown significantly in recent years and this initiative is part of the CSA’s broader strategy to combat online financial fraud and enhance investor protection in the digital age,” said Stan Magidson, chair of the CSA and chair and CEO of the Alberta Securities Commission, in a release.
“Proactive investor protection is a cornerstone of our mandate, and this innovative solution supports our efforts to better protect Canadians from investment fraud,” he added.
Grant Vingoe, chair of the CSA’s policy coordination committee and CEO of the Ontario Securities Commission, said, “The success of this initial phase shows that this technology can make a real difference, and the results show the impact it is already having.”
“By identifying fraudulent websites quickly, we are taking meaningful steps to safeguard Canadians’ financial futures,” he added.
Given the surge in online fraud, the regulators called on investors to report suspected scam sites and remain vigilant to red flags of investment fraud — including promises of high returns with low risk, high pressure sales tactics and fake endorsements.