Hinge Romance Scam Niki Hutchinson

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Niki Hutchinson and Her Father

Niki Hutchinson was networking on Hinge to meet new friends prior to moving to California, and met "Hao". They appeared to have a lot in common - including being from her same hometown back in China. They chatted and even had a brief video call (Hao didn't stay on long, which she assumed was just because he was shy). She knew nothing about cryptocurrency, but "Hao" described himself as an expert. She had recently received $390,000 from selling her mother's house, and "Hao" suggested she could invest her money on a platform named "ICAC" which he was using, and that he could teach her. The platform purported to be generating her profit, and so she invested more money. Her father also had money, and joined "ICAC" to invest as well. They also took out some loans to invest more. Finally, when she went to withdraw, she was informed by "ICAC" operators of owing a very large "tax bill" of $380,000. She was unable to get any of her money out of the platform. She subsequently went public on multiple news outlets about her story. Her funds have been traced to an Asian cryptocurrency scam group and none appear to have been recovered so far.

About Niki Hutchinson

Niki Hutchinson was a 24-year-old social media producer from Tennessee. As a way to make new friends before moving to California, [Niki] began to use the online dating website "Hinge." She was visiting a friend in California when she matched on Hinge with a man named Hao, who said he lived nearby and worked in the clothing business. They soon became friends.

The pair continued texting on WhatsApp for more than a month after she returned home. Niki told Hao that she was adopted from China. He told her that he was Chinese, too, and as it turned out he hailed from the same province as her birth family. He started calling her “sister”. They made a joke that he was her long-lost brother. At one point they video chatted. Hao partly showed his face and hung up quickly. Niki assumed he was shy. One day, a new topic came up in the conversation.

“I want to teach you to invest in cryptocurrency when you are free, bring some changes to your life and bring an extra income to your life,”

Niki's mother had just died, She had just inherited $280,000 from the sale of her childhood home, her portion of a sum which was split with her father. Hao had suggested that she invest that money in cryptocurrency.

“You hear all these stories about people becoming millionaires,” she said. “It just felt like, oh, well, cryptocurrency’s the new trend, and I need to get in.”

"I'm like, 'I've never invested in my life.' I don't know anything about cryptocurrency either. So I was very skeptical," she said. Hao reassured her that this was an area he knew well.

"Eventually she agreed, sending a small amount of crypto to the wallet address he gave her, which he said was connected to an account on a crypto exchange named ICAC. Then — when the money appeared on ICAC’s website — she sent more."

"Hutchinson said Hao told her to create an account on a legitimate site, Crypto.com. Then she said he sent her a link and told her to transfer money to the new link, to what he said was a cryptocurrency exchange platform."

"She couldn’t believe how easy it had been to make money, just by following Hao’s advice. Eventually, when she’d invested her entire savings, she took out a loan and kept investing more."

"He just kept saying things of, like, 'Look at this money that can help support your family.' Obviously that's what I wanted to do," she said.

"When her account began showing profits, she suggested to her father that he invest too and so he did."

"By December, their accounts showed a combined balance of $1.2 million, and Hutchinson decided it was time to cash out." "Ms. Hutchinson started to get suspicious when she tried to withdraw money from her account. The transaction failed, and a customer service agent for ICAC told her that her account would be frozen unless she paid hundreds of thousands of dollars in taxes. Her chat with Hao went silent."

The Reality

"Romance scams — the term for online scams that involve feigning romantic interest to gain a victim’s trust — have increased in the pandemic. So have crypto prices. That has made crypto a useful entry point for criminals looking to part victims from their savings."

"About 56,000 romance scams, totaling $139 million in losses, were reported to the Federal Trade Commission last year, according to agency data. That is nearly twice as many reports as the agency received the previous year. In a bulletin last fall, the Federal Bureau of Investigation’s Oregon office warned that crypto dating scams were emerging as a major category of cybercrime, with more than 1,800 reported cases in the first seven months of the year."

"Experts believe this particular type of scam originated in China before spreading to the United States and Europe. Its Chinese name translates roughly as “pig butchering” — a reference to the way victims are “fattened up” with flattery and romance before being scammed."

"Jan Santiago, the deputy director of the Global Anti-Scam Organization, a nonprofit that represents victims of online cryptocurrency scams, said that unlike typical romance scams — which generally target older, less tech-savvy adults — these scammers appear to be going after younger and more educated women on dating apps like Tinder, Bumble and Hinge."

“It’s mostly millennials who are getting scammed,” Mr. Santiago said.

"Jane Lee, a researcher at the online fraud-prevention firm Sift, began looking into crypto dating scams last year. She signed up for several popular dating apps and quickly matched with men who tried to offer her investing advice."

“People are lonely from the pandemic, and crypto is super hot right now,” she said. “The combination of the two has really made this a successful scam.”

"Ms. Lee, whose company works with several dating apps to prevent fraud, said that these scammers typically tried to move the conversation off a dating app and onto WhatsApp — where messages are encrypted and harder for companies or law enforcement agencies to track."

"From there, the scammer bombards the victim with flirtatious messages until turning the conversation to cryptocurrency. The scammer, posing as a successful crypto trader, offers to show the victim how to invest his or her money for fast, low-risk gains."

"Then, Ms. Lee said, the scammer helps the victim buy cryptocurrency on a legitimate site, like Coinbase or Crypto.com, and provides instructions for transferring it to a fake cryptocurrency exchange. The victim’s money appears on the exchange’s website, and he or she starts “investing” it in various crypto assets, under the scammer’s guidance, before the scammer ultimately absconds with the money."

"What makes this particular scam so insidious is how much more elaborate it is than the Nigerian prince scams of yore. Some victims have described being directed to realistic-looking websites with charts and tickers showing the prices of various crypto assets. The names and addresses of the fake exchanges are changed frequently, and victims are often allowed to withdraw small amounts of money early on, making them more comfortable depositing larger sums later."

“This kind of scam is quite labor-intensive and time-consuming,” Mr. Santiago, of the Global Anti-Scam Organization, said. “They’re very meticulous in their social engineering.”

"Cryptocurrencies are particularly useful to scammers, experts say, because of the relative privacy they offer. Bitcoin transactions are publicly visible, but because digital wallets can be set up anonymously, technically sophisticated criminals can obscure the trail of money. And because there is no central bank or deposit insurance to make victims whole, stolen money usually can’t be recovered.

What Happened

Niki was tricked into sending multiple payments to the scammers in December of 2021. She subsequently went public with her story.

Key Event Timeline - Hinge Romance Scam Niki Hutchinson

Date	Event	Description
December 3rd, 2021 2:56:56 PM MST	Largest Transfer	The largest reported transfer of 73,470.507957 USDT is made from Niki's Coinbase wallet to the scammer's wallet. TBD - The CBS article reports a smaller transfer of 26,450.862441 USDT, however no address was provided and this hasn't been located on the blockchain.
December 10th, 2021 2:07:24 PM MST	Large Transfer	A transfer of 48,985.92145 USDT is made from Niki's Coinbase wallet to the scammer's wallet.
February 21st, 2022 3:00:00 AM MST	New York Times Coverage	The situation is covered in the New York Times article along with a similar situation involving Tho Vu. The article describes how romance scams that involve feigning romantic interest to gain a victim’s trust have increased in the pandemic, and so have crypto prices. This has made crypto a useful entry point for criminals looking to part victims from their savings. A 24-year-old social media producer from Tennessee, Niki Hutchinson, fell victim to a crypto romance scam last year. She was visiting a friend in California when she matched on Hinge with a man named Hao, who said he lived nearby and worked in the clothing business. Eventually, when she’d invested her entire savings, she took out a loan and kept investing more, before realising the transaction was a scam. The combination of loneliness and the current excitement around cryptocurrencies has made this a successful scam, especially among younger and more educated women on dating apps. Scammers typically move the conversation off dating apps and onto WhatsApp, where messages are encrypted and harder for companies or law enforcement agencies to track. Scammers pose as successful crypto traders and offer to show the victim how to invest their money for fast, low-risk gains.
February 22nd, 2022 4:02:00 PM MST	CBS News Coverage	The situation is covered by CBS. This includes a full video where Niki and her father recount the situation, some of the transfers made, and more about her current family and living situation. The article inaccurately reports the exchange used as Crypto.com and implies the reverse order of two of the transactions. TBD any more information here?
February 23rd, 2022 7:43:00 AM MST	USA Today Coverage	The situation is covered by USA Today. TBD Check differences in article over time.
February 24th, 2022 7:18:00 AM MST	KFOR News Coverage	The situation is covered in a KFOR news article. TBD
December 3rd, 2022	Listed as Scam To Avoid	The incident receives specific mention in a TechResearchO blog post.

Technical Details

TBD

Total Amount Lost

The losses appear to stem from multiple payments which Niki made to the scammers. Reported blockchain transactions add up to a total of 148,907.291848 USDT.

• 73,470.507957 USDT on December 3rd, 2021.
• 48,985.92145 USDT on December 10th, 2021.
• 26,450.862441 USDT at an unknown time.
• Roughly 241,092.708152 at other times which haven't been produced.
• It is unclear if her father invested any further funds.

The final balance on her ICAC account was $1.2m, however a significant portion of this money were fake returns - a number displayed on a website.

The total amount lost has been reported as $390,000 USD.

Immediate Reactions

“I was like, oh, God, what have I done?” she said.

"I messed up my life. I messed up my dad's life," Hutchinson said.

"When she tearfully told her father about the scam, he comforted her."

"All I could do was just hug her and tell her 'It's okay. It's okay.' And it was hard. It was hard. It was, we lost everything," Melvin Hutchinson said.

Ultimate Outcome

Niki Hutchinson's case was investigated by CipherBlade.

Investigation By CipherBlade

"Rich Sanders investigates cryptocurrency scams as co-founder of the company Cipherblade. When he looked at Hutchinson's transactions, he described it as a "pig-butchering scam."

"The name really comes from the fattening up before the slaughter," Sanders said.

"In Hutchinson's case, he found her money started in those legitimate cryptocurrency accounts but the links the crooks told her to transfer the money to were digital wallets belonging to the scammers."

"Cipherblade's review found additional fake accounts the company says appear to be linked to the same scammers. The company told CBS News that the scammers may have stolen more than $20 million."

"Sanders said that the money likely went to an organized ring of scammers operating out of Asia who prey on inexperienced victims."

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

Ongoing Developments

Ms. Hutchinson and her father now live in an RV and are working to rebuild their lives. She is also continuing to work with local police in Florida to track down her scammer. She doesn't expect to get her money back, but she hopes that by publishing her experience, she can encourage others to be more cautious about strangers who promise to help them invest in cryptocurrency.

"I just hope others don't have to fall for it. So if me sharing this story helps that, then I'm so grateful for that opportunity"

Individual Prevention Policies

Niki chose to send her funds to an offshore "investment" platform based on the sole recommendation of her "friend" Hao. No check was made into the legitimacy of the platform with any regulator, nor did she seek any second opinion from anyone else. The platform didn't provide any ability to confirm that funds were stored securely, and her only evidence that the balance existed there was a balance on a webpage. In addition, she chose to keep her assets on the platform, deposit more funds, and recommend her father to deposit more funds, without first attempting a withdrawal.

When using any third party custodial platform (such as for trading), it is important to verify that the platform has a full backing of all assets, and that assets have been secured in a proper multi-signature wallet held by several trusted and trained individuals. If this can't be validated, then users should avoid using that platform. Unfortunately, most centralized platforms today still do not provide the level of transparency and third party validation which would be necessary to ensure that assets have been kept secure and properly backed. Therefore, the most effective strategy at present remains to learn proper self custody practices and avoid using any third party custodial platforms whenever possible.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Greater awareness is needed to educate on the risks and tactics used in romance scams, as many people have been caught off-guard. An industry-based insurance fund could provide some assistance for those affected.

Never take for granted the limited knowledge of users of your service and their tendency to skip past provided information. It is recommended to design a simple tutorial and quiz for new users which explains the basics of seed phrases, strong password generation, secure two-factor authentication, common fraud schemes, how ponzi schemes work, as well as other risks which are unique to the cryptocurrency space. This tutorial and quiz should ensure their understanding and be a standard part of the sign-up or download process which is difficult or impossible to skip.

Work with other industry platforms to set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

Greater awareness is needed to educate on the risks and tactics used in romance scams, as many people have been caught off-guard. An industry-based insurance fund could provide some assistance for those affected.

Create a standard tutorial and quiz for all new cryptocurrency participants, which is required to be completed once per participant. This tutorial and quiz should cover the basics of proper seed phrase protection, strong password generation, secure two-factor authentication, common fraud schemes, how to detect and guard against phishing attacks, how ponzi schemes work, as well as other risks which are unique to the cryptocurrency space.

Set up a multi-signature wallet with private keys held separately by delegate signatories from seven prominent platforms and services within the industry. Establish requirements for contributions by all platforms and services within the country, designed to be affordable for small platforms yet large enough to cover anticipated breach events. Any breach event can be brought forth by a member platform or a petition of 100 signatures for consideration by the delegate signatories. A vote of 4 or more delegate signatures is required to release any funds, which could partially or fully restore lost funds based on their assessment.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.