The Federal Bureau of Investigation (FBI) is investigating crypto scammers who posed as romantic interests to defraud victims of nearly $5 million through dubious investment schemes.

Seizure of Funds

Federal prosecutors in North Carolina are looking to seize over $4.99 million recovered from unhosted Tether (USDT) wallets linked to an elaborate crypto romance scam. The funds were seized through a search warrant executed in August and are now held by the U.S. Marshal Service.

Understanding Romance Scams

Romance scams, often referred to as pig butchering scams, involve fraudsters posing as potential love interests to build trust with victims. Once the victims are deceived into making fake cryptocurrency investments, the scammers vanish without a trace.

The operation targeted at least 71 victims, including a 60-year-old Angier resident and an 83-year-old from Minnesota. They were lured into lucrative crypto investments on a fraudulent trading platform named Bitkanant, which closely resembled the legitimate Singapore-based Bitkan exchange.

Once the victims transferred the USDT to the scammers’ wallets, thinking it was a regular investment, they were informed that their accounts were frozen and withdrawals were disallowed until additional taxes and fees were paid. This tactic is commonly used to extract more funds from victims, and even if they comply and pay the additional amount, the funds are never released. In this case, the site disappeared shortly after, leaving victims with no recourse.

Methods Used by Scammers

Court documents reveal that scammers used fake identities, such as “Jeanie” and “Alice,” to approach the victims on social media platforms like WhatsApp. In one instance, the fraudsters fabricated a story about an uncle who had developed a sophisticated algorithm for predicting Bitcoin price movements, using this as a hook to convince victims of the legitimacy of the investment scheme.

Just two of the victims identified by the FBI lost upwards of $2.75 million to these scammers. While no arrests have been made, the FBI is currently investigating the case.

Senior Citizens at Risk

Over the past years, the Bureau has repeatedly warned about the growing prevalence of such scams, which increasingly target older adults. According to its September report, crypto scam losses exceeded $5.6 billion in 2023 alone, with individuals over 60 as the most affected demographic.

In March 2023, the Virtual Currency Unit within the Brooklyn District Attorney’s Office found that a 51-year-old woman lost over $22,000 to a crypto romance scam. Earlier this year, the United States Federal Trade Commission also issued a warning about the rise in romance scams, urging the public against transferring any funds to individuals met online who promise investment opportunities.

A March study by the University of Texas revealed that over $75 billion was lost to crypto romance schemes between January 2020 and February 2024.

Stay informed about the latest developments in cryptocurrency and finance to protect yourself from potential scams. Always verify the legitimacy of investment opportunities and be cautious with online relationships involving financial transactions.

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