Detection and protection from crypto romance scams

You likely know what risks you face if you invest in cryptocurrency. The crypto market is highly volatile, and its decentralized status means no central authority backs the value of digital currencies. Another threat to investors is crypto romance scams.

Anyone who owns any form of cryptocurrency is a potential target for crypto romance scams. Here’s how to detect them and strategies to protect your finances from malicious cybercriminals.

What Are Crypto Romance Scams?

Crypto romance scams are similar to other online scams many people fall victim to every year.

In crypto romance scams, fraudsters create fake yet convincing profiles on popular social media platforms like Facebook and Instagram or dating apps like Tinder, Bumble and Hinge.

According to the California Department of Financial Protection and Innovation (DFPI), these con artists reach out to people and try to develop romantic relationships with them.

These scammers have ulterior motives, such as gaining access to someone’s digital crypto wallet, dazzling someone with their supposed wealth and tricking innocent victims into sending them specific amounts.

In June 2022, the Federal Trade Commission (FTC) reported that $185 million of total crypto losses -- almost one in every three dollars worth of crypto -- were tied to crypto romance scams since 2021. The FTC also reported that the median amount investors lost due to a romance scam was a whopping $10,000.

How to Detect Crypto Romance Scams

Crypto romance scams are becoming more frequent, so investors must remain vigilant and look out for warning signs. Other types of fraud can also occur, such as:

• Pump and dumps
• Rug pulls
• Ponzi schemes
• Phishing
• Phony job offers
• Upgrade scams
• Fake exchanges and digital wallets

Here are some of the clear warning signs of romance scams to be on the lookout for:

• Scammers suggest moving your "relationship" to private communication platforms, such as SMS texting, email or instant messaging apps.

• When the time is right, the scammer makes an urgent request for money and asks you to pay with gift cards, crypto assets or prepaid debit cards.

• Some con artists convince victims to download fake or encrypted apps on their smartphones. These phony apps look real but leave investors open to theft.

• Victims who want to remove funds and use fake apps might find their accounts locked or have to pay an "exit fee" to withdraw funds.

• Scammers often try to move the romantic relationship too fast.

Almost every type of scam seems convincing at first. However, if it sounds too good to be true, there’s a likely chance that you’re the target of fraud, whether it’s crypto-related or not.

Tips to Protect Yourself From Crypto Romance Scams

Here are some helpful tips and strategies to protect your crypto assets if someone targets you in a crypto romance scam.

• Only download verified, authentic apps from well-known platforms, like the iOS App Store and the Google Play store.

• Check the user’s profile picture using reverse image search on Google. Has the image been used before? If so, the person might be a fraud.

• Be on high alert if anyone tries to ask you for money, and never provide sensitive financial information.

• Ask for credentials from the suspected scammer, especially if they ask you to meet in person or want to give you any investment advice.

Failing to use these tips could put you at risk of a crypto romance scam. It’s also suggested that you only speak to verified users when you use popular social media sites or dating apps because they must complete various identification tasks.

Avoid Crypto Scams to Protect Your Finances

Detecting a crypto romance scam is a skill every investor should have, as it can prevent them from losing significant amounts of money.

Crypto romance scams are steadily increasing, so all types of investors, both novice and seasoned, need to be on the lookout. Use these tips and keep the warning signs in mind when interacting with a potential romantic partner.

Image credit: lp-studio/depositphotos.com

Devin Partida writes about AI, apps and technology at ReHack.com, where she is Editor-in-Chief.