Crypto investing fans and critics alike can agree that the space is rife with scams and fraud. Scams can come in the form of tweets, texts, or other types of messaging asking users to send crypto, usually in exchange for some sort of reimbursement or purchase.
Of course, spotting these schemes is relatively straightforward since they usually don't come from accounts that users know personally. However, a new crypto scam that operates via dating apps is using romance to lure in victims who may have no idea that the user they've been messaging for months is a scammer.
"I'd heard a lot about crypto in the news. I'm a curious person, and he actually was very knowledgeable about the whole trading process," Tho Vu, a victim of a romance scam on the Hinge app
In 2021, the Federal Trade Commission (FTC) received reports of around 56,000 romance scams which in total tricked victims out of $139 million. Between 2020 and last year, the number of these reports nearly doubled. The FTC states that, over the past five years, romance scams have resulted in more losses than any other FTC fraud category.
Last fall, the office of the Federal Bureau of Investigation in Portland released a bulletin warning of the rise in romance scams. The bulletin stated that scams using romance, even via dating apps, "have been around for a long time." These scammers convince victims that they are truly in love, gaining the trust needed to trick them.
"The new twist comes when the bad actor claims to be an expert cryptocurrency investor," the FBI wrote. "He offers to help the victim make big money, too. Once the victim invests, the scammer allows the victim to withdraw a small amount of profit from the alleged account."
At this point, the bulletin states that the scammer will push the victim to invest more and more money into the scheme, giving excuses as to why the victim can't withdraw any funds.
"He tells the victim that there are additional taxes or fees that need to be paid, or the minimum account balance has not been met," the bulletin continues. "This entices the victim to provide additional funds."
While traditional romance scams targeted older and less tech-savvy victims, these scams are more commonly targeted against younger people, particularly educated women on Tinder, Bumble
"It's mostly millennials who are getting scammed," Santiago told the Times.
Another big difference between the current romance scams and notorious online scams of old, like the Nigerian prince scam, is the amount of effort and time put into pulling it off. After the scammer convinces the victim to put money into crypto through a legitimate site, they then direct the victim to invest that crypto via a fake site. Some victims report being sent to sites that looked real and established, only for their money to disappear.
Scammers tend to use crypto schemes because there's virtually no way to get the funds back after they're sent, and the system allows for more anonymity.
The pandemic has been a major contributing factor in the growing popularity of these romance crypto scams. First, lock-downs and social distancing give scammers believable excuses for why they can't meet victims in person. Scammers often pose as residents of other countries, making hypothetical travel even more difficult. The pandemic has also exacerbated feelings of loneliness among adults stuck inside, pushing more people onto dating apps.
