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Crypto Companies Team Up With Social Media Apps to Fight Romance Scam

2 mins
Updated by Harsh Notariya
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In Brief

  • Tech giants form "Tech Against Scams" to tackle rising online fraud, focusing on romance scams.
  • Major players like Coinbase, Match Group, and Meta collaborate to share intelligence and best practices.
  • Romance scams exploit victims via fake relationships and crypto investments, costing millions annually.
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In a significant move to combat online fraud, several prominent tech companies have formed a coalition named “Tech Against Scams.”

This group aims to tackle the rising tide of online scams, particularly romance scams, by fostering collaboration and sharing intelligence across industries.

How Tech Against Scam Plans to Deal With Romance Scam

The coalition includes major players such as Coinbase, Match Group (parent company of Tinder and Hinge), Meta, Kraken, Ripple, Gemini, and the Global Anti-Scam Organization. By joining forces, these companies aim to create a unified front against the sophisticated tactics used by scammers. Their efforts will focus on sharing best practices, threat intelligence, and strategies to educate and protect users.

“Scammers often use multiple platforms to pull off their fraud, so a united front encompassing social media, dating apps, financial institutions, and cryptocurrency platforms significantly enhances our ability to identify and mitigate fraudulent activities,” Ronghui Gu, co-founder of blockchain security platform CertiK told BeInCrypto.

Romance scams have become increasingly prevalent. Fraudsters use fake identities to build relationships with potential victims through text messages, social media platforms, or dating apps.

Read more: 15 Most Common Crypto Scams To Look Out For

After establishing trust, scammers introduce the idea of crypto investments. Eventually, they persuade victims to transfer funds to accounts under the scammers’ control. This process is often referred to as “pig butchering,” highlighting the gradual, systematic exploitation of victims.

In response to these threats, Tech Against Scams plans to disrupt the tools and methods fraudsters use. This will make it harder for them to operate.

“Fraud schemes are becoming increasingly sophisticated, underscoring a greater emphasis on the importance of industry leaders coming together to tackle fraud and secure a safer digital environment for users. We are dedicated to disrupting emerging online scams through collaboration, information sharing, and enhanced consumer education,” Philip Martin, Chief Security Officer at Coinbase, said.

BeInCrypto reported a recent example of the impact of these scams on May 18. The US Department of Justice (DOJ) arrested two Chinese nationals, Daren Li and Yicheng Zhang, for orchestrating a romance scam that led to the laundering of at least $73 million.

The DOJ’s investigation revealed extensive coordination between the conspirators. This included communications discussing the scheme’s logistics and the use of various shell companies to facilitate money laundering. The scam involved converting more than $73 million into the USDT stablecoin and transferring over $341 million in virtual assets to a crypto wallet.

As cryptocurrency adoption grows, so does the ingenuity of related scams. According to a Chainalysis report, romance scams have increased eighty-fivefold since 2020. Losses from such scams are suspected to reach $374 million in 2023.

Read more: Crypto Social Media Scams: How to Stay Safe

Revenue Growth by Scam Sub-Class
Revenue Growth by Scam Sub-Class. Source: Chainalysis

This highlights the urgent need for initiatives like Tech Against Scams to protect consumers from these evolving threats.

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Harsh Notariya
Harsh Notariya is a journalist at BeInCrypto, who writes about various topics, including decentralized physical infrastructure networks (DePIN), tokenization, crypto airdrops, decentralized finance (DeFi), meme coins, and altcoins. Before joining BeInCrypto, he was a community consultant at Totality Corp, specializing in the metaverse and non-fungible tokens (NFTs). Additionally, Harsh was a blockchain content writer and researcher at Financial Funda, where he created educational reports on...