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Investors face an increased risk of falling victim to cryptocurrency scams involving fake relationships established through social media, dating apps, and networking sites, according to federal officials. Scammers often pose as romantic interests, old friends, or investment professionals to gain the trust of their targets before convincing them to invest in crypto and ultimately defrauding them through fake investments.

“Relationship investment scams, including those related to crypto asset investments, pose a risk of significant harm to retail investors, and the threat is on the rise as these scams gain popularity among fraudsters,” said Gurbir S. Grewal, the director of the Securities and Exchange Commission’s Division of Enforcement. The SEC recently took action against criminals who stole millions of dollars from investors in schemes involving WhatsApp, LinkedIn, Instagram, and fake crypto asset trading platforms.

Crypto, such as bitcoin and ethereum, is a digital currency that has become increasingly popular among criminals, leading to a rise in crypto-related scams. In 2023, consumers lost an estimated $5.6 billion to such scams, with investment scams accounting for about 71% of total losses.

Criminals are turning to crypto for fraud due to its decentralized nature, the speed of transactions, and its ability to facilitate global money transfers. These scams are often elaborate “long cons” that can result in significant financial losses for victims. It is important to be cautious of investment advice from individuals met online, especially if they push for investments in crypto and promise unrealistic returns.

To protect yourself from crypto romance scams, be wary of investment advice from strangers online, avoid suspicious websites impersonating legitimate financial institutions, and verify the legitimacy of investment apps before using them. Additionally, be cautious of promises of early withdrawals or guaranteed profits, fake testimonials, and investment opportunities that seem too good to be true. Always double-check the registration of an investment firm on BrokerCheck before making any financial decisions.

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