Online Romance Cryptocurrency Scams On The Rise

Scams carried out by means of romantic attraction are one of the oldest tricks in the book – but reports from the Financial and Cyber Crime Group reveal that many fraudsters have modernized their methods.

Investigators have reminded Australians to stay vigilant to online romance scams, following a spike in complaints involving cryptocurrency-related fraud – many of which start on online dating platforms.

The Financial and Cyber Crime group has investigated more than 70 complaints from victims over the last six months –some Queensland victims have lost several hundred thousand dollars.

Criminal Organizations Seem To Be The Culprits

The ASIC has reported that from March through May of 2020, the rate of online scams involving cryptocurrency has increased by 20%. These scams follow a generally predictable pattern.

First of all, a romantic partner or even a simple acquaintance tells an unsuspecting victim how they made money on a certain trading platform and encourages them to deposit as many funds as possible. Reassuring the client that it is perfectly safe to trade – since blockchain transactions cannot be faked – the bad actor gains the victim’s trust.

The catch, however, is that the platforms the victims are directed to are actually fake and do not deal with cryptocurrencies. Once the new user starts trading, the user is shown fake data to convince them that they are turning a profit.

Eventually, the user is shown more fake data showing trading losses, despite the fact that there is either no trading taking place – or the devaluation of the cryptocurrency imitated by the platform is nowhere as severe.

Once a victim tries to withdraw whatever funds they have left, the bad actor either suddenly cuts off all contact or requests more money in order to release the remaining funds.

The targets also often become victims of identity theft or data mining, carried out through the usual methods – however, due to the nature of cryptocurrency trading platforms, it does not look out of place for the fake website to request a photo of an ID card and a selfie in order to perform KYC.

The ASIC suggests all traders employ caution and use their better judgment. Before engaging in cryptocurrency trading, always make sure that the platform you are trading on is legitimate. For an in-depth list of measures you can take to stay safe while trading cryptocurrencies, you can check out our article on the subject.