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Monday, August 15, 2022

Scam At First Sight — How Crypto Con Artists Are Targeting Dating Apps

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The combination of pandemic loneliness and the buzz around crypto has made for a fertile hunting ground.

You know what they say: If it seems too good to be true, it probably is. As cryptocurrency scammers take to dating apps to entrap people, would-be romantics need to look out for their finances as well as their hearts. Here’s how.

The backstory

Crypto prices increased during the pandemic, making the digital currency a handy starting point for potential con artists. With online dating also on the rise, apps like Hinge became the perfect place to ensnare potential victims. 

How does it happen?

Tho Vu, 33, told the New York Times about her encounter with a “boyishly handsome” architect who called himself Ze Zhao. Zhao told her he’d help her make money online, and within weeks, Vu had sent more than $300,000 worth of Bitcoin to a legitimate-looking address. Mr. Zhao had told her it was connected to an account on the Hong Kong cryptocurrency exchange OSL. It’d actually gone into Zhao’s digital wallet, and he took off with the cash.

But aren’t these scams obvious?

Oh, no. The combination of pandemic loneliness and the buzz around crypto has made for a fertile hunting ground — and unlike “traditional” romance scams, it’s tech-savvy millennials who are the usual targets.

The scammers’ operations are incredibly sophisticated. As the NYT reports, the perpetrator begins by helping their victim to buy cryptocurrency on a legitimate site, like Coinbase or Crypto.com, and will then instruct them to transfer it to a fake — but very real-looking — cryptocurrency exchange. Sometimes, they’ll even make it possible for their victim to withdraw small amounts of money initially, lulling them into a false sense of security. They’ll then guide their victim towards various investments, before finally vanishing with their money.

Some scammers even go so far as to create fake mobile apps complete with phony reviews and ratings, and make them available from the App Store and Play Store. They’ll stick around after their victims make a small initial deposit using the app, but as soon as they transfer a larger amount, the scammer will take off.

About 56,000 romance scams amounting to $139 million in losses were reported to the Federal Trade Commission last year — nearly double the number of reports the agency received in 2020.

So what should we look out for?

Scammers tend to start their con by shifting conversations off offline onto apps like WeChat or WhatsApp, where messages are encrypted. This makes them more difficult to track.

Unfortunately, moving the chat to WhatsApp is hardly unusual in the online dating world, so it’s not quite “enough” of a red flag for this specific danger on its own. But if the discussion begins touching on crypto — and your new acquaintance starts offering you investment advice, it’s time to run.

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