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Cryptocurrency Romance Scams Are on the Rise

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According to the FBI, people in the U.S. lost $133,400,000 to romance scams between January 1st and July 31st of 2021. The average amount lost per user was in the tens of thousands of dollars. Often, scammers trick the victims into thinking they’re investing in cryptocurrencies.

How Cryptocurrency Impersonation Works

“The scammer’s initial contact is typically made via dating apps and other social media sites,” the FBI says. “The scammer gains the confidence and trust of the victim—through establishing an online relationship—and then claims to know about cryptocurrency investment or trading opportunities that will result in substantial profits. The scammer directs the victim to a fraudulent website or application for an investment opportunity. After the victim has invested an initial amount on the platform and sees an alleged profit, the scammers allow the victim to withdraw a small amount of money, further gaining the victim’s trust.”

The FBI explains that once the scammer has a victim on the hook, they’ll keep coming up with more reasons for the victim to send them money.

“After the successful withdrawal, the scammer instructs the victim to invest larger amounts of money and often expresses the need to act fast,” the Bureau says. “When the victim is ready to withdraw funds again, the scammers create reasons why this cannot happen. The victim is informed of additional taxes, that fees need to be paid, or that the minimum account balance has not been met to allow a withdrawal. This entices the victim to provide additional funds. Sometimes, a ‘customer service group’ gets involved, which is also part of the scam. Victims are not able to withdraw any money, and the scammers most often stop communicating with the victim after they cease to send additional funds.”

The FBI offers the following advice to help people avoid falling for these scams:

  • Never send money, trade, or invest per the advice of someone you have solely met online.
  • Do not disclose your current financial status to unknown and untrusted individuals.
  • Do not provide your banking information, Social Security Number, copies of your identification or passport, or any other sensitive information to anyone online or to a site you do not know is legitimate.
  • If an online investment or trading site promotes unbelievable profits, it is most likely that—unbelievable.
  • Be cautious of individuals who claim to have exclusive investment opportunities and urge you to act fast.

Protect yourself and your employees from cryptocurrency impersonation and other social engineering scams with Security Awareness Training.

Information used in this article was provided by our partners at KnowBe4.

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