In recent years, cryptocurrency has been causing a major buzz in the financial market as investors throng the landscape to make fortunes for themselves from its lucrativeness. However, the decentralized feature of a cryptocurrency, through the application of blockchain technology has enabled crypto transactions to be anonymous, from end to end.
Meanwhile, data breach, and in turn, online scams and fraud is on the increase with the growing level of global technology. Crypto romance scams are one of such trending online scams that are taking over the crypto space.
According to a report by the United States Federal Trade Commission (FTC), $1 billion worth of crypto was lost to scammers in 2021, which was over five times the loss in 2020 and sixty times the loss recorded in 2018. Out of the $1 billion scams, crypto romance scams account for $185 million.
Tinder Swindler, a well-liked Netflix show, did not include any episodes about cryptocurrency fraud. There is no doubt that Simon Leviev (the show’s protagonist) could easily be a cryptocurrency dating scammer. All it takes is some trust-building and a willingness to be duped by an attractive and charming lead character like him.
Scamming people out of cryptocurrency has become a cottage industry, to say the least. According to a Federal Trade Commission study from February 2022, romance scammers defrauded consumers of $139 million in cryptocurrency.
People who aren’t actively hunting for love on dating apps like Tinder, Bumble, and Hinge are also a target for cyber romance scammers. They may pretend it was a mistaken message from Instagram or WhatsApp.
The Operation Of Crypto Scammers Using Online Dating Apps
Crypto dating scammers invest a lot of time in their victims and develop a relationship until they feel trust has been created and the victim is ready to be taken advantage of.
As these dangerous approaches become more widespread, it pays to be on the alert for warning indicators and remain vigilant.
Most crypto-dating scams follow the pattern nicknamed “pig butchering” or “she zhu pan” in Chinese, apparently because fraudsters are always lurking around and making their victims feel good before deceiving them into losing their money exactly like a farmer fattens a pig before slaughtering it.
In many documented situations, scammers wait weeks or months in a relationship before mentioning cryptocurrencies and their potential.
Anyone accessing the internet is at risk of Bitcoin frauds, not just those with cryptocurrency assets.
How To Detect A Crypto Romance Scam
1. The Crypto Romance Scam Is Similar To Previous Mode Of Scam
Scammers used to trick people into buying gift cards online before cryptocurrency became the preferred method of payment for pig butchers. Scammers were able to take advantage of the lack of consumer protection afforded by these cards. As if that wasn’t exciting enough, crypto came along, promising self-custody and little to no customer protection.
Some scams are as simple as persuading victims to transfer Bitcoin to strangers they’ve formed a relationship of trust. Cryptocurrency is no exception to the rule of not sending gift cards to strangers online.
Even if the victim does not pay crypto to the fraudster, there are other methods of defrauding them.
2. Promise Of Huge Return On Investment
The Global Anti-Scam Organization keeps an extensive list of websites that are regularly utilized in pig butchering scams; many of these websites include cryptocurrency. The con artist may have you create an account on one of these websites that are owned by their accomplices in crime. This will give you a phony sense of security because the websites appear to be legitimate.
It is also possible for the scam to take place on a legal cryptocurrency service, like Uniswap.
You may end yourself investing your money in coins owned by scammers if you follow the advice of your scammer. One-half of all token ads on Uniswap were found to be fraudulent in a November 2021 study (not necessarily tied to romantic scams, of course), so investing in projects recommended by internet strangers isn’t likely to pay off.
Although the smart contracts are distinct, several of these scam advertisements even use the same names as popular cryptocurrencies. Scammers will later deplete the pool’s liquidity, resulting in worthless tokens.
How To Prevent Crypto Romance Scam
1. Avoid Signing Unfamiliar Contracts With Your Crypto Wallet
Scammers may assist you to shift crypto from a centralized exchange like Coinbase to an Ethereum-based wallet like MetaMask in a more sophisticated way.
Despite their novelty, cryptocurrency wallets aren’t the most user-friendly tools for newcomers. As far as red flags are concerned, they won’t show you what you’re about to sign in plain English.
If you sign a malicious contract through your wallet, you could lose all of your crypto on-chain. Approach links that ask you to authorize using MetaMask with caution, especially if they originate from online strangers who won’t reveal their faces.
2. Run Your Due Diligence
Victims of crypto dating scams frequently complain that their online companion refuses to meet them face-to-face or over video call because they are bashful and aren’t ready.
Scammers are using images of other people to construct convincing online identities, which is why this happens. You can use a reverse image search to verify the identification of the person in the photographs. To do this, you can use the camera icon on Google or the upload button on TinEye to upload the photo and search by that image using Google’s reverse image search or TinEye.
It’s important to note that even if a match is found, the photos may have been taken from a private social media profile that the fraudster had access to.
There are, however, a few scammers who know enough to use real people’s images. One scammy crypto project developer used AI-generated photographs of persons that don’t exist – just like that.
A Look Into Typical Crypto Romance Scam Example
John started dating at almost 30. After college, he married his high school girlfriend, and they recently opened up. He started using dating apps to explore this new world.
Xia Li sparked his interest. Beautiful Singaporean immigrants, they shared many interests. They progressed from the dating app to WhatsApp and exchanged photographs, videos, voice messages, and even had a faceless video call.
John and Xia formed feelings soon. Xia told him she loved him, and they conversed every day, with a plan to meet physically. John questioned Xia about her hobbies a week into dating. He told her he was also interested in investing in Bitcoin. John forgot about the exchange until Xia brought it up a week later.
John figured, “Why not?” Here was someone eager to guide him through crypto investing. Xia later helped him invest $200 in global. cc.
John was ecstatic when $200 became $240. Xia urged him to invest more when he withdrew the money. First, he refused, but then he thought of his wife’s little house ideas. Why not invest in cryptocurrency? He’d seen it operate; it was obvious. John said, “I was susceptible.”
His wife gave him $5,000 from their 401k to invest. If Xia’s site had worked before, he figured it was safe to use again. Before he invested, she warned him about “very, very significant withdrawals.”
Again, $5K became $6K. Xia recommended he invest more. Xia lent him money to keep trading when he said they had no more money. She kept pushing, and he became aggressive.
John finally stopped ignoring Xia’s red flags and left the investing program. When he tried to withdraw the money, the service required a 25% fee or $1,500 in Bitcoin. He’d spent all his money on the venture and couldn’t withdraw it.
Xia insisted he remains and invests, but he refused. She said she knew where he and his wife lived and would send “street thugs” to beat them up. John blocked Xia and called the police. He never spoke with her again and hasn’t received his $5,000.
If you are looking for love online, it’s crucial to keep an open mind and be wary of everyone you meet, especially if money is brought up. Otherwise, you could find yourself heartbroken and bankrupt.