FBI: Crypto fraudsters using LinkedIn to target investors with 'sweetheart' scams

The FBI said Friday that online scammers have found a new mark – professional social network LinkedIn.

Victims have lost “small fortunes” in life savings, reported CNBC on Friday. One user they met lost $1.6 million.

“It’s a significant threat,” Sean Ragan, FBI special agent who runs the San Francisco and Sacramento, California, field office.

“This type of fraudulent activity is significant, and there are many potential victims, and there are many past and current victims.”

A scammer creates a fake profile and reaches out to a LinkedIn user over the site’s messaging function. They build rapport with small talk about business matters, then offers to help the victim make money by investing in cryptocurrency.

Ragan said fraudster typically directs the user to a legitimate investment platform first, only telling them to move the investment to a site controlled by the fraudster after gaining their trust.

The special agent drew a parallel to romance scams, also known as “sweetheart scams,” another type of investment fraud where the criminal creates an illusion of romantic interest to gain a victim’s affection and trust.

This new style of fraud differs by earning trust through supposed financial expertise – fitting for a social network made up largely of white-collar professionals.

The victims interviewed by CNBC said they did not suspect to be scammed on LinkedIn because it is trusted by most as a platform for business networking.

CNBC was invited to attend a regular Zoom meeting of victims defrauded on LinkedIn, on the condition the session’s participants’ faces were concealed and their names not revealed. Their losses reportedly ranged from $200,000 to $1.6 million.

“We just never thought there could be such malicious intent behind a LinkedIn profile,” said one victim who lost $350,000.

“We’ve lost a lot of money,” said another victim who lost $700,000.

“And it’s not just all of our savings, people have lost their houses and their car loans. It’s life destroying and soul crushing.”

LinkedIn acknowledged a “recent uptick of fraud on it’s platform” and cautioned its users in a blog post Thursday.

“While our defenses catch the vast majority of abusive activity, our members can also help keep LinkedIn safe, trusted, and professional. If you do encounter any content on our platform you believe could be a scam, be sure to report it so that our team can take action quickly,” wrote Oscar Rodriguez, Product Leader on Trust, Privacy & Equity at LinkedIn.