Nova Scotians urgently warned of ‘pig butchering’ crypto scam

Nova Scotians are being urgently warned of a widespread crypto-related scam that has left numerous people suffering substantial losses.

According to the Nova Scotia Securities Commission, some victims — including those in Nova Scotia, the rest of Canada and the U.S. — have lost hundreds of thousands of dollars.

The commissions calls it a “pig butchering” scheme.

It usually starts off when the victim gets an unsolicited message, generally through text, email, social media, or they click on a crypto trading ad on a social media site.

The victim is asked to communicate through WhatsApp, Telegram or SMS text, which the commission says makes tracing the scammer difficult if not impossible.

The scammer develops a relationship with the victim, convincing them to deposit a small amount of money into a crypto trading account.

The victim is then provided with fake statements showing large gains to persuade them to investment more money, which the commission refers to as “fattening up the pig.”

None of the money is actually used to buy crypto, and when the victim tries to withdraw their money, the scammer demands fictional taxes or fees before eventually disappearing.

“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 commission cautioned

“The scammer may also sell this information to other scammers, who will try to further exploit the victim.”

That might mean the victim could be contacted again by someone falsly claiming to be able to recover their funds for a fee.

“Victims of this type of scam are unlikely to recover their money,” the commission said. “People should resist responding to unsolicited requests or ads asking for more money to recover losses.”

It said these scammers are good at covering their trail and generally operate outside of North America, so even if they can be identified, they are beyond the reach of Canadian and U.S. securities regulators.

Because of that, there usually isn't much that can be done to help victims.

“Everyone should be very wary for themselves and their friends and family members of unsolicited messages or advertisements recommending investment in crypto assets,” said the chair of the Nova Scotia Securities Commission, Paul Radford, in a news release. “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.”

The commission has offered up the following advice for people considering trading in crypto assets:

• crypto asset trading is highly risky, especially from scams, but also from volatility, hacking and other risks including technology failures
• only use crypto asset trading platforms or dealers registered in Canada; a list of registered platforms is on the commission website
• giving out any personal or financial information, or downloading trading apps or file-sharing software, opens people to financial and identity theft
• people should never use credit cards or lines of credit to invest
• losses from crypto assets scams are often significant and unrecoverable.