An early 20s woman from Tennessee lost 390 thousand dollars to a crypto dating scam. She met a fraud on a dating site who persuaded her to invest in cryptocurrency for a second income stream. Although she didn’t have prior knowledge of this battlefront, she agreed. After a year, her wallet showed a profit of 1.2 million dollars. When she tried withdrawing her wins, the account froze and said she had to pay taxes ($380 thousand) to withdraw the amount. In the end, she ended up losing everything to a scam website.
This is not one isolated incident. According to the FTC report in 2021, more than 56 thousand dating scams have been reported, leading to a loss of 139 million dollars.
What Is A Crypto Dating Scam?
Scammers are now targeting dating apps by triggering the greed for money with some lustful talks. One victim mentioned that the scammer persuaded her that cryptocurrency trading would help her make more money for their honeymoon. Crypto dating scams kindle romantic interests to gain trust, and when someone you love recommends something, it becomes a word-of-mouth advertisement, which is said to have the highest conversion rate.
On a side note, blockchain has been integrated into the dating business too. There are several crypto dating apps in the market where blockchain technologies help match you with your soulmate. These apps promise to remove fake profiles, improve data security, and more. While most of what they claim is practically viable, an overwhelming majority of them are scams.
Also Read: Crypto Heists: The 10 Biggest Scams in Crypto History
Why Is There A Hike In Crypto Dating Scams?
Just like everything else, let’s blame the romance scams on the pandemic. One researcher mentioned that people were lonely during the pandemic with more time spent inside the home. Thus, they naturally reached out to online dating sites. Money was tight for many working-class people, and crypto hype was huge. All these combined made dating sites a petri dish for crypto scammers.
Increase In Scammers
Crypto dating scams are tearing up roofs in numbers. Romance scams have always been in play. According to FTC reports, in 2016, 87 million dollars were lost due to romance scams; in 2021, the losses rose to 547 million dollars. Among these, around $139 million was due to crypto dating frauds. This amount is five times higher than that of 2020. Approximately 18% of all romance scam victims invested in cryptocurrency and got scammed.
Also Read: Crypto Police: Australia’s Counterattack To Crypto Criminals
Target Demographic For The Crypto Dating Scam
According to the Global Anti-scam organization, crypto dating scams target less-tech, savvy young adults. In contrast, general romance scams focus on old adults looking for younger love interests. Most dating apps have their experience with crypto scammers soiling their reputations.
Crypto victims are usually less tech-savvy males, and the scammers typically pose as well-educated, successful women. Unlike the Nigerian prince scam, this is not a one-shot mail. These scammers spend weeks and months creating a relationship before even bringing in the term ‘cryptocurrency.’ You don’t have to know what cryptocurrency is to fall for this scam. Some scammers even went through the trouble of helping victims learn about it and walk through the first purchase.
Why Is This Scam Hard To Beat?
Every crypto transaction is visible, but digital wallets can be tricky. Anyone can set up these wallets anonymously and obscure the money trail. There is no deposit insurance to back up the victim; thus, getting back the money becomes a Herculean task.
How Does the Scam Work?
- With all the love talk, the scammer would convince the victim to invest in coins. So, the victim will pour his life savings into currencies controlled by them. The scam listing might look like a legit major player. Soon, the scammer would suck up the liquidity and leave without a trace.
- If you are already using an exchange account, they would recommend you move your cryptos to another account via wallet. These wallets might have malicious contracts, and you would never know what you are signing up for, especially the beginners. Any link your ‘love-interest’ sends might be riddled with backdoors to swindle your money when it is on-chain.
Origin Of The Scam
This style of scam was first identified as originating from China. Later, there were more such incidences in Europe and the US. Do you know that the name given to this style of scammers by the Chinese is ‘Pig butchering’? Like a pig farmer would fatten the pig before butchering, the scammers would romance the victims before killing their savings.
The solution is to remember what your mother said when you first started walking to school on your own – do not trust strangers with candy. Never take money advice from someone you haven’t seen. Don’t let anyone persuade you to invest in something you usually wouldn’t. Crypto dating scams are real and wreak havoc- both financially and emotionally.