Do you think I'm paranoid just because I don't want my friend to hang out with someone they met online
Probably just cautious. Why don't you want your friend to hang out with this person?
My friend could get involved with the wrong people
It is not your business who your friend hangs around with. You should not interfere in your friends social life or your friend will believe that you are being pushy and interfering.
WTF! NO I'm not thinking like that at all. It's just that they don't know them
It's still not your place to tell them not to hang out with someone else. I understand your concern, but you should trust that your friend knows what they're doing.