(NEXSTAR) – A 24 year-old Tennessee woman says she lost hundreds of thousands after a mystery match on the dating app Hinge convinced her to invest in cryptocurrency – then disappeared with the bitcoins. It’s only one of the latest instances of romance scammers using cryptocurrencies to hide their identities.
Niki Hutchinson tells the New York Times she’d just inherited $300,000 after selling her family home following her mother’s death.
Then, she matched with a man named “Hao” on Hinge. They bonded over their shared Chinese roots and conversations continued over the WhatsApp messenger for over a month. The two spoke over video chat only once, Hutchinson says, but Hao only showed part of his face before hanging up.
But Hao soon urged Hutchinson to invest her money, texting: “I want to teach you to invest in cryptocurrency when you are free, bring some changes to your life and bring an extra income to your life.”
She says it went well and she saw big returns on smaller amounts Hao helped her put into a crypto wallet – she felt encouraged to invest the rest of her savings, eventually even taking out a loan to add in. At one point, she’d accrued a $1.2 million balance, USA Today says.
But when she later tried making a withdrawal, she learned the investments didn’t exist. Even more, the person on the phone tried getting her to pay a $380,000 “tax bill.”
“You hear all these stories about people becoming millionaires,” she tells NYT. “It just felt like, ‘Oh, well, cryptocurrency’s the new trend, and I need to get in.’”
The Federal Trade Commission recently reported romance scams were up 80% in 2021, with the largest reported losses were in crypto. Out of the 56,000 romance scams reported to the FTC, $139 million of losses were paid in crypto.
Victims of romance scams aren’t just the lonely elderly, however. The FTC says people ages 18-29 are increasingly falling prey, with the average median loss being $750 per person.
Meanwhile, the median loss for a crypto scam victim: $9,770.
Cryptocurrencies make it easier for scammers to remain anonymous, so tracking them down is much harder than money transfers, which are tied to a bank. Unlike traditional transactions, crypto lives in an open marketplace and there’s no FDIC backup if you’re swindled.
For crypto investment scams, the scammer will generally direct their victim to fraudulent – but legitimate-looking – crypto exchange sites and encourage them with unbelievable returns on small investments. While you should never send money to anyone until you’re sure of who they are, it’s always important to research any and all sites or claims a person makes about what they can do for your money.