I have been warning you about romance scams for many years.  More recently I have been warning you for the last few years about the myriad of scams involving cryptocurrencies such as Bitcoin.  In the last couple of years a new scam combining the romance scam and cryptocurrency scams have surfaced with one victim in Colorado, Steve Belcher losing 1.6 million dollars.

Romance scams generally follow a familiar pattern with the scammers  establishing relationships with people, generally women, online through various legitimate dating websites and social media using fake names, locations and images.  The FBI has issued a warning about a new trend in romance scams in which the scammer tells his victim that he or she has inside knowledge about cryptocurrency investing and directs the victim to a phony website that purports to be a legitimate cryptocurrency trading site.  Not long after “investing” in the cryptocurrencies provided, the victim soon finds that there is no investment and that she or he has lost all of the invested money.  This scam originated in China in 2019 and is called sha zhu pan or pig butchering in English.  The name is derived from the practice of luring in victims, “fattening them up” by convincing them to continually “invest” more money and then stealing all of the money.

The scammers initially contact their victims on dating or social media apps and pretend to develop a close relationship.  After a while the scammer informs the targeted victim that he or she is making a lot of money investing in cryptocurrencies and suggests the victim download and use a cryptocurrency app used by the scammer.  Generally, the victims are lured into investing more and more money by what appears to be both dramatic increases in the value of their account and their ability to withdraw some of their profits.  However, once the victim has been persuaded to invest larger and larger sums of money, the scammers steal the money and the victim is left with nothing.

TIPS

It is important to remember that you should never  invest in something that you do not completely understand.  This was a mistake that many of Bernie Madoff’s victims made. Cryptocurrency scams quite often involve complicated language and investment terms that is purposefully unclear in an effort to confuse potential investors from understanding the real facts. You also may want to check out the SEC’s investor education website at www.investor.gov.  Scammers can be very convincing and it may sound like there is a great opportunity for someone to make some money, but you must be careful that the person making money is not the scam artist taking yours.

Also, the apps used in the pig butchering scam may appear to be legitimate, but they are not found on official app platforms such as Google Play or the Apple App Store.  Do your homework before investing in cryptocurrencies and only do business with well established cryptocurrency exchanges.  Never invest merely because of the recommendation of someone you may have met online.

For those of you receiving the Scam of the day through an email, I just want to remind you that if you want to see the ever increasing list of Coronavirus scams go to the first page of the http://www.scamicide.com website and click on the tab at the top of the page that indicates “Coronavirus Scams.”  Scamicide was cited by the New York Times as one of three top sources for information about Coronavirus related scams.

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