During the Covid crisis, internet cons have increased and some of their victims are left with little recourse to recover their lost funds. Jeremy Wilson (not his real name) lost up to £20,000 in a cryptocurrency scam that started on Grindr and resulted in him using Binance.
Sometime in May, Wilson met a man on Grindr dating app. The man introduced himself as David and was chatty and friendly. Wilson explained:
“It started as a normal conversation. We moved to WhatsApp and exchanged messages. After a few days, he started telling me about crypto trading and how he could show me how it worked and how I could earn money from it. It seemed like a genuine connection.”
Unfortunately for Wilson, that was not going to be the case. He had hooked up with a scammer who convinced him within a week to hand over around £20,000.
During the widespread lockdown in 2020, dating scams increased, with one analysis platform Which? reporting a 40% increase in the cases involving people getting duped into sending money to people they met only online. In Wilson’s incident, instead of asking for financial help, the man he met convinced him to sign up for a fake investment.
At first, he was urged to set up an account with Binance and pay £500. Binance is a crypto exchange where investors can buy and sell digital currencies like Ethereum and Bitcoin. The UK Financial Conduct Authority (FCA) warned about the site recently and banned Binance Markets Ltd from operating in the United Kingdom.
Recently, reports emerged that TSB wants to ban users from purchasing cryptos amid fears that there are increasingly high fraud rates on the platform where they are sold. Monzo, Barclays, and Starling Bank have already done the same, blocking all transfers of Binance and other sites.
Wilson used his First Direct account to pay into the website, and then the scammer guided him on how to move the money to a trading platform where he could allegedly invest it. His first payment on one Wednesday night was followed by more on Sunday and Monday, reaching £12,000.
Every time the criminal guided him through the transactions and ‘investing’, his screen showed him making money and being free to transfer all of it back to Binance. On Sunday, First Direct flagged a payment to Binance for £3,000, which Wilson confirmed. He said:
“At this stage, I was still keen to take part and did not believe I was part of a scam. Again, I bought the currency on Binance, transferred it to the trading app, showed me how to trade using WhatsApp and screenshots, and then transferred the funds back to Binance and into my current account.”
However, after the transfer on Monday things started to take a wrong turn. His ‘account’ on the trading site stopped working and ‘David’ told him to contact customer care. When he contacted customer care, he was informed that his account was blocked and he had to pay a 50% deposit of his account balance to unlock the funds inside it.
From there he suspected that something was wrong but after a long 24 hours decided to pay the imposed fine. After paying, he tried to withdraw the remaining money, just as he had been shown, but was not successful. A persistent call to ‘customer services’ resulted in another request for money.
“At this stage, I was distraught and knew that I had been scammed.”
Wilson mentioned that he never intended to invest a lot of money, but the scammer spent a week mentally and emotionally manipulating and abusing him. By the time he sent the last payment, he was convinced that it was the only way available for him to get his money back.
Wilson reported the case to Action Fraud and then contacted First Direct to say that he had been conned and inquired if the platform would refund his money. The platform refused and told him that the scam had already happened after he transferred his money from Binance, so he needed to complain about the exchange.
First Direct commented:
“We are very sorry Mr. Wilson has been a victim of an elaborate scam, and fully appreciate how the situation has impacted him. Sadly, some unscrupulous individuals carry out criminal activities without any regard for the effect this will have on their victims.
“Upon investigation, we have concluded our fraud detection systems worked as intended but, because Mr. Wilson sent the money to an account in his name before transferring the money on again, there is no further action we can take.”
In the case of Binance, a spokesman stated:
“Binance is very serious about our responsibility to protect users from attempted scams and frauds. Where we are made aware of these kinds of claims, we immediately take action and have an excellent record of working with law enforcement agencies globally to assist in their investigations.”
The spokesman failed to explain what had eventually happened to Wilson’s complaint. He insisted that anybody who thinks they have been scammed needs to report to the Binance customer services, local police, and Action Fraud.
In the case of the FCA notice, the firm said that it has no direct effect or impact on all services provided on Binance.com.
“Our relationship with our users has not changed. We take a collaborative approach in working with regulators and we take our compliance obligations very seriously. We are actively keeping abreast of changing policies, rules, and laws in this new space.”
On the other hand, Grindr claims that it cannot comment on Wilson’s case but it has implemented several measures to help protect users from criminals, scammers, and all types of bad actors. The platform is even using machine learning to discover and flag all accounts involved in scamming on its platform. But, it was quick to add:
“Unfortunately, scamming is an entire industry, with extensive resources dedicated to bypassing a company’s security and authenticity measures. Social media and dating apps are a prime target for these bad actors, as scammers seek to exploit people looking to make meaningful connections. That is why we also work to educate our users on potential scams.
You can see our scam awareness guide here which outlines some common themes we’ve observed. We also publish our online general safety tips page as well as a Holistic Security Guide, available in multiple languages.”
Wilson said that he was initially convinced that his interactions with David were genuine. They shared voice notes, messaged late into the night, and made plans to meet up. He added:
“At no point did I think he was out to manipulate me in this way and neither did I think that I could be manipulated in such a way where someone could take my life savings and everything I have spent years working hard for. I have been left with nothing.”
The police told him that they do not have enough evidence to investigate the incident. Grindr, Binance, and the bank have also refused to investigate the matter further. Wilson concluded:
“I feel a huge sense of injustice, and this person is free to scam others – that’s what hurts about this situation.”
