In today's edition of YIYL, (You Invest, You Lose) we take a break from the public scams and fails I call out and we turn our attention to a darker side of the crapto scam industry. Since so much is going on in the wider shitcoin market, many of these smaller scams go under the radar.
There are plenty of them running in my country, and I've warned people against it but no one seems to listen until they get rugged. these scams are usually pushed by affiliates or through and MLM program via social media and instant messaging apps to try and recruit investors.
These investors have no clue what investing is let alone bitcoin, but they're told that handing over their cash will get them exposure to this new market that is making millionaire every day. If you know anything about bitcoin you'd smell a rat since you could purchase and hold bitcoin yourself, so why do you need a third party?
They will justify this with trading bots or strategies that are secret or proprietary and it can compress returns into a matter of weeks or months, only if you trust them with your money.
These scams aren't small change operations
Thes scams may target the poor and naive but they are by no means small bank rolled operations. As we learn from the latest bust of one of these scams, Law enforcement authorities in Italy and Albania busted a suspected cryptocurrency investment scam estimated to have netted 15 million euros (US$16 million).
Along with the bust, more than 160 electronic devices were also seized including computers, servers, digital video recorders, and a cell phone. This crime group carried out the operation out of a call center in Tirana, Albania, Eurojust said.
How the scam works
Now we can't be sure where these groups secure the databases of users phone numbers and email addresses, but we can assume it had to come from a KYC database because how would you know any of these people would be interested in shitcoins.
Plenty of exchange databases have been leaked over the years and can be purchased off the dark web and used for these kinds of operations, and just continues to show why KYC is such a danger and helps no one.
Anyway, the scammers would work their way down the list of possible leads. These leads were then contacted by the perpetrators posing as brokers "that proposed advantageous investments in cryptocurrencies with zero risk," though it's not clear that any crypto assets were purchased.
Victims were asked to create an account with their service and transfer an initial sum, which showed an immediate financial gain, which is just changing numbers on the front end but for the user they think they're getting rich.
Victims were subsequently encouraged to make far larger investments, in some cases their entire economic capital, according to Eurojust. Once the larger deposits were made, the account details were changed and the victims were locked out.
Crypto investment scams on the rise
Crypto investment scams have proved popular with criminals as they target victims seeking to make sizable short-term financial gains, despite the market's decline this year.
Another reason why its so popular is because you're able do it without banking services and reach people from all over the world. You could run this scam and encourage users to purchase bitcoin, stablecoins or shitcoins and send it to you.
Then all you do is credit their account on the app or website and you run away with the money because no one who falls for the scam is ever going to do research or check the blockchain.
Sources:
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