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One of the common pitfalls that crypto users are constantly having to dodge is scams that are looking to take advantage of them to steal their money, data, or both. As time has gone on, the criminals behind these scams have become more adept, refining their ways to become less detectable and more efficient.
This has coincided with consumers using crypto for different purposes. More people are adding digital assets to their investment portfolios, as well as engaging in activities like gambling. As Sergio Zammit has explained, crypto casinos, such as the ones listed here, are fast on the rise. Along with the use of crypto for investment on an exchange or to play at an anonymous casino and other non-investment purposes, consumers find themselves often vulnerable to scammers.
One of the latest of these developments is in the form of crypto romance scams. The Canadian Anti-Fraud Centre has put out a public statement telling citizens to be wary of romance and investment schemes that are on the rise.
In a joint statement with the Canadian Investment Regulatory Organization (CIRO), the centre has shed more light on how these specific scams work.
“The CAFC and CIRO are warning Canadians about the threat of sophisticated online scams involving social media, dating apps and text messages. Exercise caution if an online connection suggests investing in crypto or transferring funds,” a post on Twitter/X said.
These scams typically begin with the criminal making contact with their future victim on some sort of dating platform. Over time, they develop a friendship or romantic relationship with the victim before convincing them to move the conversation to a different app. The purpose of this is to make sure that the victims cannot be helped by the dating platform, which makes them more vulnerable.
Next, victims are told about a very attractive investment opportunity involving cryptocurrency. In typical scammer fashion, the criminal will talk about the high returns they can make and assure them that this is the deal of a lifetime. The user is then directed to make a deposit on an investment platform.
These platforms tend not to be mainstream ones with proper customer protection but ones that the scammer has designed. Initially, the user has no issue depositing and withdrawing their funds from the site. To avoid setting off alarm bells and gain trust, the scammer will allow them to recover their funds until they are lured into depositing much larger sums of money on the site.
Once this is done, the victims will not be able to recover their funds and the scammers will disappear. Romance scams are not a new concept by any means but they are especially tricky when crypto is involved. Because crypto transactions cannot be reversed, it is much harder to track the criminals and recover the funds stolen.
On top of this, there is the obvious embarrassment that the victim will feel because they fell for the scam. However, the Canadian Anti-Fraud Centre has urged anyone who fell victim to such scams to report them. A lot of work is ongoing to track down the criminals behind them and any information will be useful.
Plus, the centre is due to impose new reporting laws for digital asset service providers from 2026. This will require such service providers to record the name, address, date of birth, jurisdiction of residence, and taxpayer identification numbers of their customers.
In the event that someone is scammed, there will be more information for law enforcement to go off of. At the same time, however, a major step in this romance scam is to have the victim communicate on a third-party platform so that there is less of a digital trail.
While it has become more prevalent in recent times, this is not the only form of crypto scam in the industry. One common tactic is getting users to click a link so that they can claim free crypto. Instead, clicking such a link gives the criminals access to their digital wallet, after which they steal all of the victim’s assets.
Another scam method is convincing users to download a seemingly innocent software file which then harnesses their computing power to mine crypto without their knowledge. There are also sextortion scams that demand crypto as a ransom payment with threats of leaking explicit content of the victim.
As long as cryptos continue to be valuable, there will always be criminals looking to take advantage of consumers. This is why crypto users need to educate themselves about these different types of scams so that they do not fall victim. If they fall victim anyway, they should inform law enforcement and provide as much information as possible. With enough information and precautions, the instances of crypto scams, romance or otherwise, can be significantly reduced over time.
