Cryptocurrency scammers continue to use textbook tactics and sophisticated techniques. Romance scams pass as one of many approaches used to bait unsuspecting victims.
Between August and September, Hong Kong police discovered a local scam group operating a well-organized fraud center in a Hung Hom industrial unit. The bad actors leveraged deepfake AI to execute a cross-border cryptocurrency-related romance scam, targeting men across Asia.
The 21 men and 6 women, aged between 21 and 34, were local university graduates majoring in digital media. These technology specialists collaborated with overseas fraudsters and IT experts to develop a fake crypto investment platform.
With this in place, they designed training manuals in Chinese and English to script fake romance stories. Leveraging AI-based “deepfake” technology, they held video chats with their male victims from mainland China, Taiwan, India, and Singapore, among other regions in Asia.
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The deepfake AI ‘hooked' the victims on appearances and voices, taking advantage of their emotional needs. The scripts and deepfake Ai made them believe they were establishing romantic relationships with highly desirable women.
“They even discussed future plans with the victims, creating a false sense of happiness to encourage them to continue investing,” Senior Superintendent Fang Chi-kin said.
On this account, the male victims made bogus cryptocurrency investments and ultimately discovered they could not withdraw the funds. The scammers' operations stretch back to October 2023, managing to defraud victims out of HK$360 million (roughly $46 million).
In romance scams, otherwise termed pig-butchering swindles, perpetrators prey on the victim's love or emotional interests to establish trust. Ultimately, they convince their victims to invest in fake crypto projects with the promise of lucrative returns. Eventually, they disappear with the money.
Deepfake AI remains a prevalent tool among crypto scammers. The rise of AI is adding to the challenge, aiding perpetrators in executing more convincing schemes. Professor John Griffin from the University of Texas reported in a study that romance scams caused more than $75 billion in losses between January 2020 and February 2024. Based on the study, most of the perpetrators operated out of Southeast Asia.
Bitget Research recently reported a sharp rise in scams using deepfake technology, with malicious activities surging 245% in 2024 alone. Since 2022, these scams have caused losses amounting to $79.1 billion. One US citizen filed a lawsuit after losing $2.1 million in Bitcoin to a scheme run by a Southeast Asian crime syndicate.
In April, the Brooklyn District Attorney's Virtual Currency Unit dismantled a similar operation. Amid growing concerns, agencies like the Federal Trade Commission (FTC) and the Federal Bureau of Investigation (FBI) have issued warnings about the rise of cryptocurrency-related romance scams.
“No one thinks their online love interest is going to scam them, but scammers are good at what they do,” the FTC said.
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Deepfake AI scams have extended beyond romance schemes. In June, a deepfake of Elon Musk made headlines during a five-hour livestream, where bad actors impersonated Musk at a Tesla event. Viewers were directed to deposit Bitcoin, Ethereum, and Dogecoin on a fraudulent website. Similar scams, including fake SpaceX giveaways, have also surfaced on platforms like YouTube.
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