Crypto Romance Scams Rise in the US, FTC Issues Warning: Details

This week, the FTC has published an official alert addressing the rise in crypto romance scams.

Written by Radhika Parashar, Edited by Manas Mitul | Updated: 11 June 2024 19:45 IST

Crypto Romance Scams Rise in the US, FTC Issues Warning: Details

Photo Credit: Pexels/ Tima Miroshnichenko

Crypto romance scams reportedly led to losses worth $40 million in Australia last year

Highlights

Crypto romance scammers hunt for victims through dating apps
Scammers promise high returns and a romantic relation with victims
FTC has asked people to cut off from strangers offering crypto advice

The United States Federal Trade Commission (FTC) has identified a rise in romance scams targeting the crypto community in the US. The FTC has clearly asked people to cut off from online love interests who may be discussing investment ideas, especially related to cryptocurrencies and other digital assets, with them. The regulatory trade body has reminded people that nobody can guarantee sure shot profits on crypto investments, given the volatile nature of these assets.

This week, the FTC published an official alert addressing the rise in crypto romance scams. In this category of scams, fraudsters get in touch with potential victims through dating apps under the pretence of initiating a romantic relationship. Upon gaining the trust of their targets, these scammers lead their victims into investing in shady or fake crypto assets in the promise of high returns. After getting the required investments, these scammers tend to vanish, leaving their victims high and dry.

“No one thinks their online love interest is going to scam them, but scammers are good at what they do. They establish an emotional connection with you so you're more likely to believe that they're an expert in cryptocurrency investing, for example. But that online love interest is a scammer. People have lost tens of thousands ― sometimes millions — of dollars to romance scammers,” the FTC wrote in its official blog post on June 10.

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As part of these rising crypto scams, the FTC has warned users about being promised no-risk investments and unconventional methods to wire funds online. The financial watchdog has further noted that people should strictly not trust strangers teaching them ways to invest in cryptocurrencies.

“If you think someone you met on social media is a scammer, cut off contact. Tell the social media platform, and then tell the FTC,” the blog added.

This is not the first time, however, that romance scams have been listed as a dangerous category leading to bulky financial losses. Back in February this year, a 37-year-old Indian woman currently residing in Philadelphia, US, reportedly lost $450,000 (roughly Rs. 3.7 crore) in a cryptocurrency romance scam.

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The same month, Australia's National Anti-Scam Centre had reportedly warned the citizens to be extra careful against romance-baiting scams which have resulted in losses of over $40 million (roughly Rs. 335 crore) in 2023.

As per the FTC, “This all starts with someone contacting you — seemingly at random — on social media. But they've done their homework, checking out your profile and other information on the platform. They want to help you invest your money in the crypto markets, or they say they can teach you how to do it. You might think they have your financial well-being in mind, but they don't.”

In March 2024, the FBI claimed that crypto investment scams rose by 53 percent last year. Many nations around the world are now accelerating efforts to deploy regulations to oversee the crypto sector and spell punishments for criminals making the sector unsafe for innocent investors. The UAE is among the first countries to lay down definitive rules outlining the punishments for crypto scammers, which includes jail time of up to five years along with a fine of AED 1 million (roughly Rs. 2 crore).

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Further reading: Cryptocurrency, Crypto Scams, Crypto Romance Scams, US

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More