The U.S. Securities and Exchange Commission says cryptocurrency relationship scams can cause “catastrophic harm.” how to avoid them | Wilnesh News

Federal officials have warned that investors face a high risk of cryptocurrency scams linked to fake relationships established through social media, dating apps and websites.

This type of fraud occurs when scammers use dating apps, social media platforms, professional websites or encrypted messaging apps to pose as lovers, old friends, investment professionals or other acquaintances.

Over time, the fraudster gains the target’s trust. At some point, they came up with the idea of ​​investing in cryptocurrencies — and then Scam victim Through false investments.

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“Relationship investing scams, including those involving investments in crypto assets, pose a risk of catastrophic harm to retail investors, and as these scams become increasingly popular among scammers, this Threats are increasing rapidly.

Last month, the U.S. Securities and Exchange Commission bring It has taken its first enforcement action against cryptocurrency nexus scams. The U.S. Securities and Exchange Commission (SEC) has accused criminals of stealing millions of dollars in investor funds through two separate schemes tied to WhatsApp, LinkedIn and Instagram, as well as fake crypto asset trading platforms NanoBit and CoinW6.

Cryptocurrency (including Bitcoin and Ethereum) is a type of digital currency. it is Usage increased That includes criminals, according to the FBI.

In its latest fraud report, the FBI stated that consumer losses due to cryptocurrency-related fraud were estimated at $5.6 billion in 2023, a 45% increase from 2022.

The agency said investment fraud accounted for approximately 71% of total losses in 2023.

The FBI says cryptocurrency investment scams come in “many forms,” ​​but the most prominent last year were relationship scams.

“The dollar losses can be significant,” Kim Casci-Palangio, director of the Cyber ​​Crime Support Internet Romance Scam Recovery Team, said in a statement. recent podcasts Published by the Financial Industry Regulatory Agency, the federal brokerage regulator.

“For our program, the average loss per person is about $178,000,” Casci-Palangio said.

Jules was the victim of a cryptocurrency relationship scam, and she details her crimes in a new article FINRA Podcast. FINRA is using only Jules’ first name to protect her identity. It’s unclear how much she lost in total, but revealed it was a “several thousand dollar transaction.”

Jules, who grew up in the Seattle area, began sending purported romantic interest messages on a dating app in the spring of 2022 while she was finishing her final weeks of her undergraduate degree.

She said that after “a few weeks of regular text messaging” the man “slowly” began to introduce the idea of ​​investing in Bitcoin.

“The guy was really nice. We had a really good interaction,” Jules said. “It starts with friendship. It starts with communication. It’s not like, ‘Hey, give me your money.'”

Jules said the lover was a con man who concealed his identity and provided information that made him appear to be a knowledgeable cryptocurrency investor, such as fake screenshots of thousands of dollars in a digital wallet.

She said she took out a personal loan to fund cryptocurrency investments. Initially, Jules said, she started with “a little bit” of money, about $1,000, and eventually moved on to “larger amounts.”

• Be wary of investment advice or promotions from people you know online but have never met in real life, even if you’ve had a phone or video chat – no matter how trustworthy they seem.
• Watch out for domain names or website names that pretend to be legitimate financial institutions, especially cryptocurrency exchanges. Scammers often use websites that mimic real financial companies (but often with slight differences) to make people believe they are legitimate.
• Do not download or invest using apps that look suspicious unless you can verify their legitimacy.
• If someone pitches you an investment, don’t get a false sense of security because you can withdraw money early or see “profits.”
• Beware of fake recommendations from people who claim to be making money.
• If an investment sounds too good to be true, it probably is.
• Double check whether the investment company is registered Broker Check.