Canadian securities regulators are employing new technology to disrupt fraud, helping them take down more than 3,900 websites peddling investment scams over the past six months.
The Canadian Securities Administrators, an umbrella organization made up of provincial and territorial securities regulators, is working with a third-party technology service provider that processes millions of reports a day and uses machine learning algorithms to identify indicators of fraud.
Once the fraudulent websites, which include fake investment platforms and cryptocurrency scams, have been identified, the CSA works with internet service providers to block users from accessing them.
The CSA declined to name the service provider. The Ontario Securities Commission led the procurement and testing of the technology service, the CSA said in a press release Thursday.
Top executives at the OSC have said they are witnessing a massive surge in online scams and fraud, enabled by emerging technologies such as artificial intelligence and cryptocurrency.
Fraud victims reported a total of $544-million in losses to the Canadian Anti-Fraud Centre in the first nine months of this year, putting 2025 on track to surpass the $645-million of losses reported to the agency in 2024.
The agency has said its figures represent an estimated 5 per cent to 10 per cent of all fraud.
“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,” Stan Magidson, the chair of the CSA and the chair and CEO of the Alberta Securities Commission, said in a statement.
The technology provider identifies problematic websites by processing 10 million or more reports a day, including DNS, or Domain Name System, registrations and community abuse reports.
That allowed the CSA, working with ISPs, to block thousands of websites associated with 6,900 individual URLs, between June 5 and Nov. 23.
“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,” Grant Vingoe, chair of the CSA’s policy co-ordination committee and chief executive of the Ontario Securities Commission, said in a statement.
Before procuring the new technology, the OSC was tackling the issue on a site-by-site basis, Bonnie Lysyk, the watchdog’s executive vice-president of enforcement, previously told The Globe and Mail.
Ms. Lysyk said at the time that preventing wrongdoing before it occurs is a priority for the securities watchdog.
Earlier this year, Canadian securities regulators collaborated with law-enforcement agencies, cryptocurrency trading platforms and a blockchain analysis firm on Operation Avalanche, an initiative aimed at disrupting fraud in the cryptocurrency space.
During the operation, which took place last March, investigators identified cryptocurrency wallets that had been compromised and contacted their owners to warn them of the threat. In total, 89 investors were informed that they may have lost, or were at risk of losing, some of their assets.