Internet scams are nothing new. From “lost princes” to tech support that “accidentally sent you their life savings”, Americans have been the target of scammers for decades. There is another type of investment scam coming from crime cartels in Southeast Asia that is very effective. This type of scam has taken $75 billion in stolen crypto since 2020. In this letter I’ll explain how the scam works, how to avoid it, and what you can do to help.
The scam starts with a text message “sent to the wrong person”, or a social media message sent from someone you don’t know. It might even come as a message on a dating website from someone you liked.
The next stage of the scam is building trust. Over the course of the next few weeks the scammer will connect with you online, asking you about your life and telling you about themselves. This takes the form of hours of messages back and forth daily between you and the scammer.
What makes this so effective is that it pairs with the loneliness epidemic in the United States. People need those connections, and this scam takes full advantage of it. I met my wife on an online dating site, and would have been a prime target for this kind of scam at that time. We all can become the victims of emotional manipulation.
The next stage of the scam is the “investment introduction”. This is done by the trusted scammer telling you how they have made a great deal of money by investing into cryptocurrency. They suggest doing the same, and provide you with a way to download an legitimate-seeming online app.
You start investing and see a high return on your money. You might even be encouraged to withdraw some of your earnings to play around with. This increases the ‘legitimacy’ of the scam, encouraging you to invest even more. As you might have guessed, there is no investment, simply a way to send your life savings to a crime cartel. When you try to withdraw your investment, you find that everything is gone.
The reason we have not seen this kind of scam in the past is the time investment required. It takes weeks of someone spending hours a day building that trust. This is completed through human trafficking in countries like Cambodia. The scammer you have been talking to is just as much of a victim as you are.
So what can you do to stop this? Firstly, if anyone online ever asks you to invest – say ‘no’. If you are getting close with someone online, ask to video chat. If something seems too good to be true, it probably isn’t. Talk to your friends and family about people you meet. Most importantly, learn about this kind of scam.