Crypto Crush: Watch out for new online romance scams and swipe left!
By Carlo Handy Charles and Mark Osmond
We turn on the news today and it is the usual stream about the latest wave of the Covid-19 pandemic and the Russian war in Ukraine. Of course, these are important, but it is difficult to understand why no one is talking about another epidemic spreading rapidly around the world now. It is not a virus and is not killing people — not directly anyway — but it is still hurting thousands of individuals and in many cases, destroying lives. What is this new epidemic? — cryptocurrency-romance scams.
Financial scams, whether involving romance or not, have been around for a long time. They used to happen via paper and postal services — e.g. letters from a Nigerian princess, or the son of a general needing your bank account details in order to spirit away millions of dollars, but they could come from anywhere — then they were perpetrated by telephone, or email, taking many forms.
More recently, romance scams started on dating websites, in which lonely people genuinely looking for love were duped and swindled by that too-good-to-be-true soulmate who had suddenly fallen on hard times and needed money urgently. We see and hear such stories and think “How can people be so gullible?”
The Pig-Butchering Scheme
There is a new type of romance scam though — one that is so clever and insidious that people who you would never expect to are falling like flies. Who are the targets? Anyone with a dating app on their smartphone.
According to Google Play, there are well over 100 million downloads of Tinder, the most popular of these, but there is a multitude of other dating apps, for heterosexuals, the LGBTQ+ community, and different ethnic or religious groups, thus exposing hundreds of millions of unsuspecting people. In case you are smugly thinking that you don’t even have a dating app on your phone, people can also be targeted via other social media platforms, particularly Facebook and Instagram, or even on professional websites, such as LinkedIn.
You may also think that you can outsmart an individual ‘catfish’ texting you from his parents’ basement, but most of the perpetrators of these new scams work in organized crime gangs. They have experts in psychological profiling who use algorithms and elaborate scripts to gradually make unsuspecting dating app users fall in love with an apparently good-looking, wealthy, professional who is also looking for a long-term relationship.
At some point, they will offer their victims financial advice, particularly in cryptocurrency investments, which they profess to have already made a lot of money from. Once they have gained a victim’s trust — and love — the plan is ultimately for the victim and scammer to invest together, getting even greater returns, only the victim’s money is real, while the scammer’s isn’t.
The long game
Until recently, the people in greatest danger on dating apps were those looking for quick one-off hook-ups. They could still get robbed, or more likely contract a sexually transmitted infection, but they are probably safe from the new romance investment scammers. Such schemes will take at least a few days, or more likely a few weeks, in order to build up a victim’s trust enough to part with significant amounts of money.
Initially, the now-trusting victim will probably invest a smaller amount of money and will see an excellent return, likely 30% or more. They may even be able to withdraw this money from the fake investment site that the technical experts in the team have set up, which will encourage the victim to be bolder and invest ever-larger amounts of money — either alone or together with their new soulmate. Again, a large return will show up on the victim’s screen, but if they try to withdraw it they will be told that they need to pay a tax, or surcharge in order to release the funds. If they do so, there will then be another apparent problem requiring even more money to be deposited in order to get their initial investment out.
At this point, most people are so desperate to retrieve their money, that they will throw ‘good money after bad’, as the saying goes. It is usually around this time that the victim appeals to the man or woman of their dreams, the one they are going to spend the rest of their life with, even though they’ve never actually met them in person. Their new life partner is unable to help, now strangely distant, suddenly broke…or has disappeared.
“I always thought that I would have never fallen for something like that,” said a victim of the pig-butchering scheme from Denver.
New targets globally
Most, but not all, of the crime organizations perpetrating these scams originated in China, and initially most of their victims were Chinese. There, it is known as ‘Sha Zhu Pan’, or the pig-butchering scheme, as the scammers slowly ‘fatten the pig’ before ‘slaughtering’ it. However, the Chinese people have wised up to this and the Chinese government has cracked down on the gangs, forcing them out of the country.
Now, they are located in various parts of the world, mainly southeast Asia, and cast their nets to Europe, North America, and elsewhere. The Covid-19 pandemic has exacerbated the problem, with the increased social isolation affecting so many single people especially. It also gives the perpetrators of the scam a good excuse for not meeting in person.
If you still think you’re too clever to succumb to this deception, some of the people we know about who have recently fallen victim are intelligent, well-off, business-savvy professionals. Despite an estimated 14 billion dollars being lost in crypto scams worldwide, we hadn’t heard of any of this until recently, as it seems to be a well-kept secret, partly because many victims are too embarrassed and ashamed to come forward, but also because governments, banks, and other financial institutions are not warning the public. Watch out and swipe left!
To learn more about this scam, check out the following articles:
