Binance’s Valentine’s Day Tips: Avoiding Romance Scams in the Digital Era

14.02.2024

Valentine’s Day, a day to celebrate relationships and love, is here. Romance is in the air, but con artists who prey on your money instead of your heart are never too far away.

Finding our soul mate has become a whole new experience thanks to the internet age. To start romantic relationships, millions of people worldwide increasingly use social media to meet others or use online dating services. These platforms make it easier to connect with potential love partners and have produced many endearing success stories, but they also make it easier for online romance scammers to operate.

Understanding Love Scams:

Their Nature and Methods of Operation

Romance scams, also known as online dating scams or romance fraud, are crimes committed by con artists who pose as prospective love interests and deceive others by creating intricate webs of lies and preying on the emotions of vulnerable individuals.

Tigran Gambaryan, Head of Financial Crime Compliance at Binance, sheds light on the mechanics of these scams:

“Imagine someone convinced they’ve stumbled upon a profound connection via a dating app or social media. These fraudsters morph seamlessly, echoing your every sentiment and aspiration with uncanny precision. They latch onto the nuances of your conversation, crafting personas that seem perfectly aligned with your ideal match. Mention your enthusiasm for a certain hobby, and suddenly, it’s their obsession too. Share your hopes for a meaningful relationship and a future together, and they echo your sentiments, professing their readiness for commitment. It’s as though they have a direct line to your thoughts, expertly reflecting your desires back at your. Reflecting on my experiences as a Special Agent, I see a striking similarity in tactics. These manipulations are not unlike the schemes I’ve seen where fraudsters sell lies to get their hands on your money. The essence of their approach remains the same: exploit trust and fabricate connections to achieve their deceitful ends.”

But underneath these endearing facades lies a sobering truth: the person on the other end is usually a con artist utilizing a fictitious profile. These con artists are masters at deceit and gradually gaining people’s confidence in order to get money or steal personal data.

The Role of Crypto in the Costly Consequences of the Growing Romance Scams

Alarming data show the scope of the problem: romance frauds are increasing overall. More than one in four persons worldwide who participated in the Norton Cyber Safety Insights Report 2023 reported falling victim to an online dating or romance fraud. In 2016, the U.S Federal Trade Commission received 11,235 complaints about dating and romance scams in the United States alone. This figure surged to an astounding 52,593 instances by 2020, a 368% rise in only four years. The situation worsened even further in 2022, with an annual increase of almost 30%. A total of $1.3 billion was lost as a consequence of the over 70,000 people who reported becoming victims of these frauds.

The same FTC report shows that although if crypto is not the most often utilized payment method in these scams, it still represents a sizable 34% of the total reported losses. However, it’s imperative to debunk the myth that crypto acts as a sanctuary for con artists. Conversely, illegal behavior in the cryptocurrency field is actually decreasing and makes up a very tiny portion of all transactions worldwide. In 2024, just 0.34% of total crypto transaction volume was linked to unlawful behavior, down from 0.42% in 2022, according to Chainalysis’ 2024 Crypto Crime Report. This trend is largely due to the diligent efforts of industry leaders like Binance, who uphold strict security and compliance protocols, warn users about prevalent hazards, guard against frauds. In the battle against blockchain-related criminality, this is crucial.

Based on statistics from Binance for 2023, around 2% of all reported fraud incidents were romantic scams. Even while this proportion may not seem like much, the victims’ total monetary losses exceeded tens of millions of dollars, with an average of around 14,000 dollars per victim. It seems that one of the most financially damaging types of fraud is romance scams, which highlights the critical need for education and prevention in the cryptocurrency community.

Exposing the Deceitful Strategies: True Narratives of Romance Scams

Global Head of Intelligence and Investigations at Binance Erin Fracolli reveals a typical pattern seen in romantic scams:

“Scammers often first connect with victims on dating apps or sites, where they build trust. Victims are lured into making investments with promises of high returns, only to later discover that it’s fake. Victims often initially invest small sums and can even make “withdrawals” or receive small amounts of their investment back, which makes the investment seem real. Eventually, however, they will be unable to recover larger deposits or “investments.” Scammers will also demand taxes, fees, or upgrades, in a last attempt to extract even more money. Victims often only realize they have been scammed at this point or after they do research on the fraudulent platforms.”

“Pig butchering” is the term used to describe this kind of financial fraud. In order to acquire victims’ confidence, scammers show their first “profits” to entice them to make more investments. The con artists disappear after taking all of the victim’s money, leaving their victims unable to get their money back. The phrase “pig butchering” refers to the practice of con artists “fattening” their victims with fictitious profits before stealing their money. These strategies have been used in several fraud schemes throughout the years and are not limited to the world of cryptocurrencies.

The following are experiences from real people who were victims of these tragic scams. In order to preserve their privacy, their names have been altered.

John’s experience on Tinder with fraudster Liddy should serve as a warning. Liddy swiftly switched their chat to WhatsApp, posing as a young Asian owner of a clothing store owner. She convinced John to put money on a high-yield platform there. John was cautious at first, investing a little amount and following Liddy’s advice, which resulted in moderate gains and withdrawals. While fostering trust, these deeds also made John less defensive. But when John tried to take out a bigger amount, the app refused to let him and threatened to suspend his account unless he paid 30% in taxes within 72 hours. John ultimately paid the whole money, but Liddy vanished and the app’s customer support stopped responding. John lost the equivalent of about $100,000 in less than two months.

Michael, another victim, came across Rose on social media, a lady claiming to be a crypto trader. Rose took a strong interest in Michael, and over phone conversations and internet correspondence, their friendship developed. She uploaded a scan of a fictitious driver’s license as proof of her identity. Michael trusted her with his money for investments as he became more at ease over time.

Tigran Gambaryan elaborates:

“With time, the victim, enticed by the promise of high returns, ended up sending crypto equal to over $500,000. It was only later that he realized it was a scam. By then, he had not only lost his savings but also his home, as he believed they were purchasing a house together. We collaborated with law enforcement to identify the scammer and helped recover $200,000 for the victim, although such outcomes are quite rare.”

In other instances, con artists take a different tack and ask for money from their victims to help them with made-up, urgent circumstances. The list of excuses offered by con artists is endless and includes anything from purportedly necessary medical procedures and dying family members to accusations of being abducted by violent criminals and the simple desire to have money for a plane ticket so that they may finally meet in person.

Erin Fracolli remarks:

“As with many scams, victims don’t meet their supposed love interests face-to-face, and their interactions are solely conducted online or over the phone.” She emphasizes, “while some scammers will even conduct video calls with victims, these video calls are often short and poor quality.”

George was the person who a lady, another victim, met on Facebook Dating. Their relationship quickly blossomed, and they looked forward to starting a family. But when George disclosed that his bank account had been freezed due to an ongoing inquiry, his story took a terrible turn, leaving him without any money and unable to provide for his two kids. Leaning on the lady for financial assistance, George was stuck in Cyprus and yearned to get back to the UK. Driven by empathy and confidence, she gave a large amount—more than $20,000 USD—because George promised to pay back the loan when he got back to the UK. Unfortunately, George disappeared, without fulfilling his reimbursement promise, when doubts surfaced and the victim stopped the money flow.

All of these tales are a sobering reminder that anyone may become a target, and that while interacting with possible love partners online, you should always be aware of your surroundings and exercise caution.

The Joint Approach to User Safety Taken by Binance

Binance is committed to maintaining a safe cryptocurrency ecosystem by actively working with international law enforcement organizations. In 2023, the company’s specialist teams—which include more than 70 members—processed more than 58,000 requests from more than 13,000 law enforcement officers internationally. Recently, Binance assisted the Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI) in the United States in a major pig butchering case, in which over $112 million in money were recovered. Many criminal organizations and con artists were apprehended as a result of these cooperative efforts.

Furthermore, the team regularly hosts training courses for law enforcement officials, offering them an understanding of the foundations of blockchain technology and the legal considerations surrounding cryptocurrencies. With assistance from the Investigations Team, Binance’s Law Enforcement Training Team planned 120 in-person and virtual training sessions in 2023. Through these efforts, Binance’s platform is made safer for users and their investments in the constantly changing cryptocurrency market.

The tactics used to carry out frauds change quickly with the cryptocurrency market, and the Binance Risk team keeps an eye on things. They utilize a variety of instruments and safeguards, such as real-time risk monitoring, to make sure our consumers don’t become victims of con artists.

Binance is emphasizing educational initiatives, such as the dedicated Know Your Scam series, to assist users remain up to date on the newest schemes and strategies that fraudsters deploy, as well as advice for avoiding them. Binance recognizes that users themselves are always the first line of defense against scammers.

How to Spot and Prevent Romance Scams

So, how can you guard against being a victim of romance scams, particularly the ones that include cryptocurrencies? Here are a few crucial pointers:

Continue Using the Dating App:

When using a dating app, stick to using the messaging feature of the app for conversation. In order to avoid being discovered on the dating site, scammers often urge you to rapidly transfer to private contact channels like text, social media, or phone conversations.

Take Caution When Viewing Profiles That Appear Too Perfect:

By creating false personas and using images of beautiful people that have been taken or altered, scammers conceal their true identities. They may even use artificial intelligence (AI) to make deepfakes, phony identification documents, voiceovers, and fake videos.

Investigate thoroughly and confirm the identity of the person linked to the profile on your own to protect yourself.

Go Slowly:

Don’t go right into a relationship. Look for discrepancies in the other person’s statement that might point to their being a fraud and ask probing inquiries.

Keep an Eye Out for Recurring Meeting Excuses:

Don’t write someone off if they keep calling in to cancel meetings in person with different justifications, particularly after a few months. This is a serious red signal, and you should become more skeptical.

Never Send Funds:

It’s probably a fraud if someone you met online and haven’t seen in person asks for financial assistance or makes big claims about profits via wire transfers, cryptocurrencies, or any other means.

Be Wary of Unreal Promises:

Relatively little risk and high rewards may be misleading; if something seems too good to be true, it most often is.

Safeguard Your Personal Data:

Never give out private keys or other sensitive personal or financial information to strangers, even if they seem to be acting on behalf of a reputable organization (police, investigative team, etc.). To protect your family and yourself, think about implementing strong cybersecurity habits and utilizing a password manager.

Keep in mind that not everyone you meet online is looking for love, so be cautious while navigating the digital terrain in your search. You can lessen your chances of falling for romance scams and safeguard both your heart and your finances by being watchful, exercising care, and paying attention to the warning indications.