Crypto Scammers Target Dating Apps

Dating app Hing’s man checked all the boxes of Tho Woo.

He was a handsome architect like a boy from China, living in Maryland on a long-term assignment. They had never met face to face – he was still waiting to get his Covid-19 booster shot, he said – but they had been texting back and forth for months and she had developed a serious crush. He called her his “little girlfriend” and told her that he was planning to take her to China to visit his family when the epidemic ended.

So when a man named Ze Zhao called Ms. Vu, who works in customer service for a security company, said she could help him make money by trading Bitcoin and other cryptocurrencies.

“I heard a lot about crypto in the news,” she said. “I’m a curious person, and he was actually very knowledgeable about the whole trading process.”

But the man was not trying to help Mrs. Vu invest his money. She found herself trapped in an increasingly popular type of financial scandal, which, she said, combines the years-old attraction of romance with the new lure of cryptocurrency overnight.

During the week, Ms. Wu, 33, sent more than ,000 300,000 worth of bitcoin, almost his entire life savings, to the address that Mr. Zhao said she is linked to an account on the Hong Kong cryptocurrency exchange OSL. The website appeared legitimate, offered 24/7 online customer support and was also updated to show Ms. Vu’s balance is changing as Bitcoin prices rise and fall.

Mr. Zhao – whose real name could not be verified – promised him that his crypto investments would help him get married and start a life together.

“We can make more money on top of OSL and go on a honeymoon,” he said, according to screenshots of his texts. Vu shared with me.

But there was no honeymoon, and no crypto windfall. Instead of going to the exchange account, Ms. Vu’s money went into the scammer’s digital wallet and disappeared.

Now, she is struggling to understand what happened.

“I thought I knew him,” she said. “Everything was a lie.”

Romance scams – a term for online scams that involve pretending to have a romantic interest in gaining the victim’s trust – have increased the epidemic. So are crypto values. It has made crypto a useful entry point for criminals who want victims to participate from their savings.

About 56,000 romance scams, with a total loss of $ 139 million, were reported to the Federal Trade Commission last year, according to agency data. Which is almost double the number of reports the agency received last year. In a bulletin last fall, the Oregon Office of the Federal Bureau of Investigation warned that crypto dating scams are emerging as a major category of cybercrime, with more than 1,800 cases reported in the first seven months of the year.

Experts believe that this particular type of scandal originated in China before it spread to the United States and Europe. Its Chinese name almost translates as “butcher of a pig” – a reference to the way victims are “grown up” with compliments and romance before they are deceived.

Jan Santiago, deputy director of the Global Anti-Scam Organization, which represents victims of online cryptocurrency scams, said it was unprofitable, unlike common romance scams – which usually target older, less tech-savvy adults. Seems to be going back in age. And more educated women on dating apps like Tinder, Bumble and Hinge.

Mr. Santiago said.

Jane Lee, a researcher at the online fraud-prevention firm Sift, began investigating crypto dating scams last year. She signed up for many popular dating apps and quickly matched up with the men who tried to advise her to invest.

“People are alone with the epidemic, and crypto is very hot right now,” she said. “The combination of the two has really made this a successful scam.”

Ms. Lee, whose company works with many dating apps to prevent fraud, said the scammers typically try to move conversations away from the dating app and to WhatsApp – where messages are encrypted and difficult for companies or law enforcement agencies to track. Is.

From there, the scammers bombard the victim with flirtatious messages until the conversation is turned into cryptocurrency. The scammer, as a successful crypto trader, offers to show the victim how to invest his money for quick, low-risk benefits.

Then, Ms. Lee said scammers help victims buy cryptocurrencies on legitimate sites like Coinbase or Crypto.com and provide instructions for transferring them to counterfeit cryptocurrency exchanges. The victim’s money appears on the exchange’s website and before the scammer finally escapes with the money, he or she begins to “invest” in various crypto assets under the scammer’s guidance.

What makes this particular scandal so insidious is how much more elaborate it is than the scandals of the old Nigerian prince. Some victims have described being directed to real-looking websites with charts and tickers showing the prices of various crypto assets. The names and addresses of counterfeit exchanges are frequently changed, and victims are often allowed to withdraw small amounts at an early stage, making them more comfortable depositing large sums later.

“This type of scam is very labor intensive and time consuming,” said Santiago of the Global Anti-Scam Organization. “They are very meticulous in their social engineering.”

Cryptocurrency is especially useful for scammers, experts say, because of the relative privacy they offer. Bitcoin transactions are publicly visible, but because digital wallets can be set anonymously, technically sophisticated criminals can obscure money traces. And because there is no central bank or deposit insurance to complete the victims, the stolen money usually cannot be recovered.

Nicky Hutchinson, a 24-year-old social media producer from Tennessee, was the victim of a crypto romance scandal last year. She was visiting a friend in California when she met a man named Hao on a hinge who said he lived nearby and worked in the clothing business.

The two continued texting on WhatsApp for more than a month after she returned home. She told Hao that she had been adopted from China; He told her that he was also Chinese and that he belonged to the same province as his birth family. He started calling her “sister” and joked that she was his long lost brother. (They video-chatted once, she said – but Hao only partially showed her face and quickly stopped.)

“I thought he was shy,” she said.

Ms. After his mother’s death, Hutchinson inherited about $ 300,000 from the sale of his childhood home. Hao suggested that she invest that money in cryptocurrency.

“I want to teach you to invest in cryptocurrency when you are free, make some changes in your life and bring extra income into your life,” he texted her, according to a screenshot from the exchange.

Eventually she agreed, sending a small amount of crypto to the wallet address she was given, which she said was linked to a crypto exchange account called ICAC. Then – when the money appeared on ICAC’s website – she sent more.

She couldn’t believe how easy it was to make money following Hao’s advice. Eventually, when she invested her entire savings, she took out a loan and continued to invest more.

In December, Ms. Hutchinson became suspicious when she tried to withdraw money from his account. The transaction failed, and the customer service agent for ICAC told her that her account would be frozen until she had paid hundreds of thousands of dollars in taxes. Her chat with Hao calmed down.

“I was, oh, God, what did I do?” She said.

Now, Ms. Hutchinson is trying to get her life back on track. She and her father live in their RV – one of the few possessions they have left behind – and she is working with local police in Florida to try to find her scammer.

Ms. Hutchinson doesn’t expect her money back, but she hopes others will be more cautious about strangers who promise to help her invest in cryptocurrency.

“You hear all these stories about people becoming millionaires,” she said. “It felt like, oh well, cryptocurrency is a new trend, and I need to get into it.”

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