Romance Scams That Run Your Crypto Wallet Dry

cryptocurrency-scamScammers are using dating sites to lure victims into phony cryptocurrency investment schemes, according to Sean Gallagher at Sophos.

These types of investment scams are known as “pig butchering,” loosely translated from the Chinese phrase “sha zhu pan.” In this case, the scammers convince the victim to participate in a liquidity pool arrangement, a legitimate but risky cryptocurrency investment technique.

“Fake pools use smart contracts that give the scammers access to their targets’ wallets,” Gallagher explains. “They may deposit cryptocurrencies into wallets to give the illusion of gains, or deposit counterfeit cryptocurrencies that have deceptive names and no inherent value. The websites used to link wallets in these scams will display data promising daily payouts, and showing the victim’s mounting but fake profits.”

The scammers draw the victims in by making contact with them on dating sites and establishing trust before steering the conversation toward cryptocurrency investments.

“The first warning flag for scam operations is that they often follow the same victim recruiting techniques and pressure tactics associated with sha zhu pan operations,” Gallagher says. “Early scams we encountered used social media sites to cold-approach potential victims, but more recent ones have used the sha zhu pan-style romantic ploys,  purposefully crafted ‘misdirected’ SMS messages meant to start conversations (‘Are you going to Liam’s party? Is this Sara?’), and other angles to improve their rate of success and widen their potential pool of victims.”

Gallagher notes that these scams rely solely on social engineering to steal the victims’ funds.

“These scams require no malware on the target’s device, and no ‘hacking’ of any sort other than fraudulent websites and social engineering—convincing targets to connect their wallet to an Ethereum smart contract that gives the scammers permission to empty the wallet,” Gallagher writes. “As a result, it is extremely difficult to prevent these scams through software protection. Fraudulent wallets and domains are identified and blacklisted as they are discovered, but scammers can quickly deploy new websites and wallets and continue to filch targets’ ‘risk-free’ stakes. Cryptocurrency stolen by these scammers is rarely recovered.”

New-school security awareness training can give your employees a healthy sense of suspicion so they can avoid falling for these types of scams.

Sophos has the story.

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