Consumer complaint received 2021-09-15
Product: Money transfer, virtual currency, or money service — Virtual currency
Issue: Other transaction problem — 
Company: Winklevoss Exchange LLC (WA)

Between XX/XX/XXXX and XX/XX/XXXX, I was manipulated into losing a total of $ XXXX USD through the Gemini XXXX platform in a romance/investment scam. So-called " XXXX scam '', it involves one scammer patiently grooming victims from online dating/social media apps over weeks to become interested in cryptocurrency, and then convince victims to join them in their hobby trading cryptocurrency on a supposedly new investment platform. Together with a " customer service '' team, they cajole and bully victims into sending more and more money with a series psychological techniques and ruses ( e.g. fabricated live charts, allowing the first withdrawal to gain trust, the friend " lending '' money to my sham account, gaslighting, etc ). In my case, I initially bought from Gemini and sent small amounts of Bitcoins in XX/XX/XXXX ( transaction records attached ), escalating to breathlessly sending $ XXXX in total within just 1 week ( XX/XX/XXXX - XX/XX/XXXX ). During that 'slaughter ' week I was trapped in a blind panic borrowing from friends and family to pay off " loans '' and " taxes '' to unfreeze my sham account. These are all under make-believe deadlines by their customer service, coupled with emotional bullying by the " girl ''. However, after paying everything I was told I owed, the scammers yet again came up with more theatrics to make it look like that I owe more again. 

I went through 2 weeks of painful realization. I then I became quite disappointed with Gemini for not protecting their customers from such a common scam and their responses. Romance scammers never asking directly for money but conniving with a supposed third-party website is something I have not heard of. This romance/investment scam combination is incredibly common as I discovered, but I as layperson can not be expected to be kept up to date with the latest scam techniques. Law enforcement, backlogged as they are with cases every day, simply can not be expected to keep up. Financial institutions like Gemini have the legal duty, regulatory responsibility, and real-world capability to detect fraud in real-time and prevent victims from being abused through their platforms. The methods in duping me can be more or less sophisticated in your view, but the fact is someone like me with unknown history and financial background can easily open a Gemini account and remit 3 times my net worth ( $ XXXX ) overseas in 2 months, with two-thirds of that ( $ XXXX ) in just one week. 

I did as much due diligence as I could as a non-cryptocurrency enthusiast, albeit under the spell of a duplicitous romantic friend. I consider myself reasonably cautious and intelligent, being a XXXX XXXX. I hence chose Gemini XXXX, which prides itself as being regulated like a New York bank. My " due diligence '' also applied to my online female friend ; I only date local, and I got convinced from daily conversations and her pictures of local streets and anecdotes that she is in XXXX like me. Since it was the peak of the pandemic, I was satisfied with her insistent assurances of meeting not now but very, very soon, as soon as restrictions lifted. I only realized later on that " she '' might never even have been in this country. Knowing my curious nature, openness to new experiences and persistence ( not giving up after my " losses '' ), I think it almost inevitable that I will be scammed by a skillful and patient enough " XXXX '' scammer. I think a fairly reasonable person, although as naive I am, would have made similar choices. 

All my transactions were done under duress and undue influence. Gemini has top-notch security against hacking attacks, but the human element seems to be under-appreciated. Again, however sophisticated or not this scam is in your view, Gemini had no defense in cases of Authorized Push Payment ( APP ) fraud and social engineering attacks on its users -- to devastating consequences. In my specific case, there were blatant warning signs ( below ) that made my further economic losses foreseeable and preventable. I believe Gemini owes an explanation for the following vulnerabilities in their platform that scammers exploit. 

1 - No Tiered Know-Your-Customer - There was no enhanced due diligence and financial background checks when my total transaction volume history crossed higher thresholds ( e.g. {$50000.00} ), as recommended by cryptocurrency compliance experts back in XXXX. 
2 - Little Know-Your-Transaction & adherence to FATF Travel Rule - Addresses I sent to are publicly known to be of unregulated exchanges, which I could have been informed of ; furthermore, one address has already been reported in public databases as a scam before I sent. 
3 - No scrutiny/friction on increasing velocity of transactions - every time I wired money to my Gemini account, I bought BTC and sent them all out within a couple of hours. They can see that cryptocurrency bought from Gemini platform were all just one way and not used for trading on their platform. In the end $ XXXX went through within just one week. 
4 - Apathy for customer 's financial safety - There is no new cryptocurrency investor knowledge test or financial background checks. Tellingly also, in one of the transactions during the week I lost $ XXXX, the sham customer service immediately informed me the wallet address I had just sent to has been " retired/abolished '' for privacy & security reasons, so they did not receive my $ XXXX payment in BTC. ( I had successfully sent to that wallet address 3 days before. ) They advised me to contact my exchange to cancel or reverse my transaction. I explained so to Gemini, but obviously Gemini can not and was moreover unhelpful in their response. This should be revealing to Gemini that a new customer is dangerously ignorant of how cryptocurrency work while playing with huge sums of money. Subsequently, I continued to buy and send more Bitcoins to make up for my " mistake '' before their imposed deadline. 

These anti-fraud and due diligence measures are not just nice to have but required for reputable fiduciary trusts like Gemini. 

I reached out to Gemini on multiple occasions right after the scam. Despite complying with their requests to tell them everything about how the scam works, Gemini was unhelpful to my entreaties for at least finding out what happened to my assets, given their blockchain experts. Their sole response was for me to go to law enforcement, which as a matter of course do not have cryptocurrency expertise or capacity. In cases of transaction disputes a bank would have told a customer everything that happened to his/her money as far as the bank can tell. 

To end, I'd like to express that I still remain open to collaborating with Gemini to share everything I know of this scam to prevent its current and future users from falling into the same.