The FTC in the United States has raised concerns about the increase in romance scams involving cryptocurrencies. In a notice released on Monday, the FTC advised Americans on how to handle situations where their online romantic partners offer them investment advice. The FTC emphasized that scammers are skilled at deceiving individuals, even in the context of romance.
These romance scams, also known as pig butchering scams, involve attackers pretending to be potential love interests to befriend victims. Ultimately, victims are deceived into making fraudulent cryptocurrency investments, leading to the scammers disappearing with the funds. Such scams have become common in the cryptocurrency industry, with a recent study by the University of Texas revealing losses of over $75 billion between January 2020 and February 2024.
The advisory, written by Colleen Tressler of the Division of Consumer and Business Education, outlined the tactics used by scammers to carry out these schemes. The FTC highlighted that scammers establish emotional connections with victims to portray themselves as cryptocurrency experts. They often promise high returns with no risks, but the FTC warned that all investments carry risks and guarantees of profits are false.
The FTC also mentioned that scammers conduct background checks on victims to gain their trust and convince them to invest. If someone suspects they are being scammed, the FTC recommended cutting off contact and not transferring any funds, whether fiat or crypto. Victims were urged to report such scams to the FTC.
Romance scams have received significant attention in the media, with reports of individuals losing large sums of money to scammers. Regulatory bodies like the FBI and CFTC have intervened to address the issue. The CFTC recently charged crypto exchange Debiex for allegedly deceiving customers by establishing friendly relationships before tricking them into opening trading accounts and soliciting $2.3 million from five customers.
Similarly, the FBI issued a warning before Valentine’s Day in 2023 about the rise in romance scams. In April 2024, the Brooklyn District Attorney’s Office successfully cracked down on a similar scam that targeted individuals across the United States.