A boom in cryptocurrency romance scams: lost $139 million
A boom in cryptocurrency romance scams: lost $139 million
Security

A boom in cryptocurrency romance scams: lost $139 million

By Eleonora Spagnolo - 14 Feb 2022

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Cryptocurrency-themed “romantic scams” have sharply increased in 2021. Reporting this is an analysis by the FTC. 

Romance scams with cryptocurrencies

In romantic cryptocurrency scams, the scammer presents himself as a successful investor and convinces the victim to entrust him with his savings. The investment is usually directed towards some forex, but the consequence is always the same: the money is lost. 

In romantic scams, cryptocurrencies are the most profitable method. That’s the ranking of the money lost: 

  • as much as $139 million was lost with cryptocurrencies;
  • $121 million was paid out through payments;
  • $93 million was given to scammers by wire transfer;
  • $36 million was received by scammers via card reloads or gift cards.  

As far as cryptocurrencies are concerned, this is five times more than in 2020 and 25 times more than in 2019. That indicates how the industry has grown. 

The average amount of money lost is also high: about $9,770 per scammed person. However, it’s not the most common way to scam: malicious people prefer gift cards. 

romance scam
Romantic scams have proliferated thanks to the use of dating apps

What are romance scams?

The FTC, in its analysis, calls them “romance scams”: they are those scams proliferated through the use of dating apps in which the malicious initiate relationships via chat, somehow manage to create an empathetic bond with a person they will never meet thanks to an apology, but at the same time have the upper hand in convincing them that they urgently need money. The victim falls for it. 

They don’t just happen via dating apps: many scammers report being contacted on Facebook and Instagram. 

In each case, the scammer makes the unfortunate victim believe that he has financial or health problems. Or they urgently need money to close a deal. Those who send them money often do so repeatedly. The scammer always promises to pay back what appears to be a loan, which in some cases “happens” with checks that turn out to be forged. 

In 2021, these scams resulted in total losses of $547 million, up 80 percent from 2020 and six times as much as the 2017 figures. 

According to the analysis, the average loss for each individual is around $2,400

Awaiting regulation

The United States has long been talking about regulations to prevent cryptocurrency scams. 

Although Congress has several proposals under consideration, including one put forward by exchange Coinbase, there is currently a lack of legislation on the subject.

New Hampshire is taking a step forward. The Governor recently signed an executive order creating a commission on cryptocurrencies and digital assets. 

The Commission will be tasked with investigating the state of cryptocurrency and the digital asset industry, understanding relevant legislative developments and how they apply to and impact the industry, and preparing a report within six months that will be submitted to the Governor, the Speaker of the House and the President of the Senate.

Governor Chris Sununu. stated:

“New Hampshire is a hub of financial innovation, and this Executive Order will further our commitment to attracting high quality banking and financial businesses in a safe and responsible manner. I am excited for the work this Commission will undertake and the recommendations they will provide so that New Hampshire can continue to advance necessary reforms that promote economic growth, foster innovation, and meet changing customer needs while ensuring safety, soundness, and consumer protection.”

 

 

 

Eleonora Spagnolo

Journalist passionate about the web and the digital world. She graduated with honours in Multimedia Publishing at the University La Sapienza in Rome and completed a master's degree in Web and Social Media Marketing.

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