Valentine’s Day, a celebration of love and romance, also serves as a stark reminder that those seeking companionship may fall victim to scams.
The online dating sector is a significant market, projected to generate $3.1 billion in revenue in 2024, with an estimated 440 million users by 2027, according to Statista.
Binance’s security and compliance department, in a report shared with Cointelegraph on Feb. 14, highlighted the growing prevalence of romance scams, as noted by security and analytics firms in recent months. Norton’s 2023 Cyber Safety Insights report revealed that 1 in every 4 adults surveyed globally admitted to being victimized by online dating or romance scams.
The United States Federal Trade Commission received 11,235 dating and romance scam complaints in 2016, a number that surged to around 70,000 reports in 2022, resulting in $1.3 billion in losses for unsuspecting individuals.
While cash remains prominent in global money laundering, cryptocurrency payments account for 34% of reported losses in romance scams, as per a recent report from the U.S. Treasury Department.
Binance’s internal data from 2023 estimated that romance scams comprised 2% of total reported cases, with an average loss per victim amounting to $14,000. Tigran Gambaryan, Binance’s head of financial crime compliance and former U.S. IRS investigator, draws parallels between romance scammers and financial fraudsters, emphasizing their exploitation of trust.
Binance’s global head of intelligence and investigations recounted instances where victims lost significant sums to scammers. One victim lost $100,000 through Tinder-initiated contact, while another sent $500,000 in cryptocurrencies to a scammer met on social media. Binance’s involvement led to the recovery of $200,000 for the latter victim.
Security firms and law enforcement agencies have identified “pig-butchering” as a growing online fraud trend. Sophos research in Jan. 2024 revealed it as one of the fastest-growing segments of online fraud, with U.S. victims losing billions to fraudulent cryptocurrency-related investment schemes. Scammers are increasingly exploiting decentralized finance (DeFi) applications and protocols to deceive victims, leveraging trust to facilitate fund losses through Web3 wallets and malicious contracts.
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