U.S. Federal Trade Commission warns of crypto romance scams

The United States Federal Trade Commission (FTC) has warned the public about an increase in romance scams often involving cryptocurrencies.

In a notice issued Monday, the FTC advised Americans on how to handle the situation if their online romantic interest offers investment advice.

“No one thinks their online love interest will scam them, but scammers are good at what they do,” the FTC said.

Romance scams, often referred to as pig slaughter scams, involve attackers befriending victims under the guise of potential love interests. Ultimately, victims are tricked into making fraudulent cryptocurrency investments and the scammers disappear.

These types of scams have become the norm in the cryptocurrency industry. A recent study by the University of Texas found that more than $75 billion was lost to these schemes between January 2020 and February 2024.

That’s why the advisory, written by Colleen Tressler of the Department of Consumer and Business Education, delved into the detective tactics bad actors use to carry out these scams.

According to the FTC, attackers “establish an emotional connection” with victims to make them believe they are “experts in cryptocurrency.”

The Commission noted that these scammers often promise high returns without risk. However, he added that all such investments carry risks and profit guarantees are fake.

Additionally, the FTC emphasized that these scammers often do background checks on victims. The FTC added that this helped them convince the victim and allowed them to “say the right things” to gain their trust, “and before you know it, your new friend is talking about money.”

The regulator also advised against transferring any funds, whether fiat or crypto, if requested by such parties: “If you think someone you met on social media is a scammer, cease contact.”

The notice also urged users to report to the FTC if they are affected by such a scam.

Romance scams have made headlines many times.

In February 2024, a Philadelphia woman lost $450,000 in cryptocurrency to these bad actors. The fraudsters befriended the woman and started a fake crypto trading app, eventually convincing her to drain her savings.

The growing importance of these attacks has led to regulatory intervention by organizations such as the Federal Bureau of Investigation (FBI) and the Commodity Futures Trading Commission (CFTC).

The CFTC filed a criminal complaint against crypto exchange Debiex on January 20, alleging that company insiders deceived its customers by establishing friendly and “close” relationships. These people were then tricked into opening trading accounts on the stock exchange.

Debiex allegedly demanded $2.3 million from five customers.

Meanwhile, the FBI also issued a warning about the increase in love scams before Valentine’s Day 2023.

In April 2024, the Brooklyn District Attorney’s Office managed to bust a similar scam that fooled many people in the United States.