There are a number of ways that individuals are targeted in cryptocurrency fraud, romance fraud is one of the most heartless tactics that fraudsters employ, where the victim is approached on social media or dating apps and drawn into an online romance. The Association of British Insurers estimates that globally over 235 million people are using dating sites, with Datareportal's report claiming there are 2,989 billion Facebook users, 922.million LinkedIn users and 372.9 million X (formerly Twitter) users to name just three social media platforms. This provides the fraudsters with an endless supply of victims giving them plenty of choice.
Romance scams are rising and several High Street banks, including Barclays and Lloyds bank report that romance scams are rising by 20%. The fraudsters in romance scams are prepared to take time to persuade their victims that they are genuinely involved in a relationship before manipulating them into sending money. Many victims lose their entire life savings to the fraudsters. The victims of romance fraud are shocked when they realise that they have been scammed and often are too humiliated to report their losses. Giambrone & Partners banking and financial fraud lawyers fully understand how victims are embarrassed by how they were duped and want to reassure them that many people fall for this common type of fraud and they will not be censured.
Joanna Bailey, a partner and head of the banking and fraud litigation department, pointed out "romance fraud can happen to anyone, the fraudsters are highly sophisticated and spend a considerable amount of time understanding their victim to build a relationship where they are trusted and believed." Joanna further commented "Victims should not let the perceived stigma of having been duped in a romance scam prevent them from reporting the crime."
Once the fraudsters have reached the position of asking for money, they have been quick to utilise new technology and changing markets and have latched on the cryptocurrency as the means of payment through blockchain into a wallet, suggesting that cryptocurrency avoids the delays seen in bank transfers leaving many victims, once they recognise that they have been scammed, with the impression that their money can never be retrieved as the blockchain is immutable. However, following Giambrone & Partners' successful approach to the High Court to enable the service of legal documents (a worldwide freezing order) as a token through the blockchain directly to the fraudsters in the case of D'Aloia v. (1) Persons Unknown (2) Binance Holdings Limited & Others, following which, there is now a very real possibility of recovering the stolen money.
Women are most likely to be victims, with 43% more romance frauds reported by women than men. Victims may not realise that they have been subject to romance fraud, so what should you look for?
Initial Contact
- The fraudster will often look for a recently single person a widow or divorced person aiming to exploit their loneliness.
- They will purport to share interests such as sports or hobbies to support the idea that they are compatible.
- Often older people are targeted as they may not be so capable of navigating the internet and researching the fraudster's name and location.
- The fraudster will suggest moving from the initial site on to text messaging. This will enable them to use an untraceable mobile phone remove with an untraceable pay as you go SIM to ensure that should their fake profile be detected and taken down they will not lose contact.
- The fraudster will not want to actually be seen on screen in person and if this does happen it will be at night and often so dark they are not seen properly. The fake profile will have another person's image.
- You will never meet the fraudster there will always be excuses – travelling for business, in the armed forces abroad or working on a contract in a remote part of the world.
The Fraudsters' Demands
- A "too good to miss" investment opportunity has arisen that must be actioned immediately in order to benefit.
- Their business project needs to replace an expensive piece of equipment urgently or the project will collapse.
- They or their relative has suffered an accident and the cost of treatment is very high.
- Their bank account has been hacked and they have no money and require money to be put in a second bank account
- They need money to set-up a home abroad where they will be able to start a new life together.
- Sometimes the fraudster will ask their victim to send them expensive items such as a laptop.
When the victim runs out of money or begins to suspect a scam and refuses to send money, the fraudster vanishes and cannot be contacted.
If you suspect that you have been a victim of romance fraud report it to your bank straight away. Giambrone and Partners' banking and financial fraud lawyers have a wealth of experience in successfully regaining the money lost in fraud.
Joanna Bailey leads litigation against cryptocurrency fraud as well as financial institutions involved in cr trading disputes, together with Forex investment issues and regulatory investigations and has some considerable success in retrieving our clients' funds lost in fraud.
She has developed a range of strategies both to find the assets of the individuals perpetrating the fraudulent schemes and restore the funds to our clients. As well as recognising culpability in the organisations facilitating (but not associated with the fraud), by failing to undertake adequate due diligence.
Joanna led the first case in Europe where proceedings were served on Persons Unknown connected with two digital wallets over the blockchain by non-fungible token or 'NFT' in a cryptocurrency fraud. Following this ground-breaking case Joanna was named as Lawyer of the Week in the Financial Times.
Joanna is highly experienced in high-value out-of-court settlement negotiations and has in-depth knowledge of the Civil Procedure Rules as well as English common law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.