Regulators in the United States and Canada have issued warnings to consumers about the rapid increase in romance scams involving cryptocurrencies, urging them to be cautious of their online interactions.
In a recent statement, the U.S. Federal Trade Commission (FTC) advised individuals to be cautious of online love interests who may be using crypto investments as a way to steal their money.
The regulator wrote:
“They want to help you invest your money in the crypto markets, or they say they can teach you how to do it. You might think they have your financial well-being in mind, but they don’t. They only care about their own financial well-being.”
Romance scams involve individuals creating fake romantic relationships to deceive victims into sending them money or personal information. Scammers often build these relationships online, through dating websites or social media, by gaining the victim’s trust before asking for money under false pretences.
The Canadian Anti-Fraud Centre (CAFC) and the Canadian Investment Regulatory Organization (CIRO) have also jointly warned about the rise in crypto scams, particularly those involving extended online communication. The authorities warned Canadians to be wary of people who discuss crypto trading or investments.
“Fraudsters may try to befriend the victim, develop an online romance, or pose as legitimate investment advisers. Over time, the scammer will suggest investing in an opportunity, often involving crypto assets”, they noted.
Despite the emotional connection they create, the FTC emphasises that these scammers are not to be trusted, as they have already defrauded many victims of millions of dollars.
The FTC highlighted several warning signs of a potential scam, such as promises of large profits, guarantees of no risk, and requests for money. The agency also stressed that no investment can guarantee profits and that all investments, including those in cryptocurrency, carry risks.
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To combat these scams, the FTC urges consumers to report suspicious activity to the FTC and the relevant social media platform. Additionally, the FTC advises individuals to warn their friends and family about the dangers of these scams.
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