How ethnic Chinese women are preyed on by crypto swindlers

Qiao Er was idly scrolling through Douyin, the Chinese version of TikTok, one hot summer day in the southern Taiwanese port city Kaohsiung, when she came across a profile of a wealthy and attractive Chinese man.

She liked a couple of videos, clips of him playing tennis, cruising around in a Ferrari and feasting on a lobster the size of a child’s bike.

Then, the unexpected happened. A message popped up in Qiao Er’s inbox from the stranger, starting a months-long online romance that would leave her bankrupt and broken-hearted.

All over the Chinese-speaking world, thousands of victims like Qiao Er are losing their life savings to cryptocurrency fraudsters that have nimbly adapted to authorities trying to crack down on the so-called “pig butchering” scam, in which victims are “fattened up” through online romances. Qiao Er fell victim to an elaborate scam racking up losses of $88,870 which included all her savings © I-hwa Cheng for the FT In London, New York and Kaohsiung, the Financial Times spoke to three women who together lost over $2mn in what they said were highly methodical scams.

With an estimated 80mn ethnic Chinese residents outside China, Hong Kong and Macau, including millionaire business owners, scammers have plenty of scope for new targets after Beijing imposed a domestic ban on cryptocurrency investments.

The pandemic provided a useful shield for the scammers to develop relationships with the women while using the excuse of travel restrictions to explain why they could not meet in person. Booming crypto prices also helped entice them into the fraud.

“It starts with an online relationship, scammers ‘fatten’ up their victims with romantic messages, grooming them on social media,” says Jan Santiago, deputy director of the US-based Global Anti-scam Organization, a non-profit group supporting victims of investment cybercrimes.

Two weeks after Qiao, a CCTV operator at a security company, met the smooth-talking stranger online, they started calling each other husband and wife, spending hours on the phone and texting throughout the day, she says. They even video-chatted, but an allegedly broken selfie camera obscured the scammer’s face.

“They wait until you’ve fallen for them with their romantic words before they start stealing your money,” she says.

It was not long before he started coaching her on how to invest in crypto, so she could live the same life that he was showing off on his social media. This took place towards the end of 2020, when Bitcoin started climbing to new highs, and even the most inexperienced investor could make easy returns.

“He told me exactly when to buy when the price was low and sell when the price was high,” says Qiao Er.

The scam perpetrated on the three victims followed the same pattern. The fraudsters told the women to buy crypto on established exchanges before asking them to transfer to fake websites that sound legitimate to the crypto newbies.

Taiwan’s National Police Agency publishes a monthly list of the allegedly fraudulent sites reported by victims, with names such as “KrakenCoin” and “Coinbase CCY” that mimic the names of real exchanges. Both sites have since shut down, which experts say is a common practice after they have been reported by victims.

The sites listed by the police have all the trappings of a legitimate trading platforms: 24/7 online customer service and charts showing live coin price fluctuations. The women could withdraw some assets into fiat currency at the start, duping them into trusting the platform.

The scammers built up a picture of the women’s finances through the online relationship, asking about their weekly salary or their car and house value. They encouraged friends and family members to join in on the scheme by promoting elaborate flash coin sales and special deals.

Qiao Er eventually transferred all of her savings to the website of an exchange called Citi.mt4. She said that when she tried to take some money out to pay her bills, customer service demanded a hefty tax to withdraw the money.

She says the man she’d met on Douyin suddenly turned bad-tempered, ordering her to borrow money from her family, friends, and the bank. When those avenues dried up, he pushed her to borrow against her car and then go to loan sharks.

She racked up losses totalling $88,870 before, one day, the Citimt4.com website suddenly disappeared along with the man she’d called her husband on social media for months. She reported the crime to the local police, who told her the chances of getting her money back were very low.

She showed the FT screenshots of the site, which included a banner claiming it had […]

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