The recent rise of cryptocurrencies brought about a new threat – scammers. If you are involved in the cryptocurrency world – or at the very least, you have browsed Twitter to look for news related to that genre – you would probably have encountered one of these scams in the last couple of months.
Today, we will be introducing you to the top 3 types of scammers in the Wild, Wild West of cryptocurrencies.
The Twitter Scammer
By using this classic scheme, scammers have been raking in thousands of dollars’ worth of Bitcoin and Ethereum from unwitting crypto investors on Twitter. As straightforward and ridiculous as it might be, this method works, and has proven to work time and time again.
What these scammers do is basically creating fake accounts to impersonate some of the biggest names in crypto, such as John McAfee, Vitalik Buterin, or Charlie Lee. The handles of these fake accounts usually deviate from the actual handles by an alphabet/number or two, which makes it rather difficult to spot the difference at first.
Then, the scammers would then reply to one of the genuine tweets by the figure that they are impersonating and claim that they will be sending over free Bitcoins/Ethereum to “celebrate an achievement” or “apologize for any inconvenience caused”. However, here comes the catch – users will have to send a certain amount of BTC/ETH first to receive the reward, but it’s usually a fraction of what they will receive a few moments later.
Except they will never receive anything back.
In fact, these Twitter scammers have gotten so good at what they do that they started creating more fake accounts to like/retweet the scam tweets, as well as to write “testimonials” about the apparent “rags to riches” experience they had after participating in this “giveaway”.
Fortunately, Twitter has taken action to crack down on these scams, although their efforts have mostly been “hits-and-misses” so far.
The Telegram Scammer
You will probably come across scammers like this if you are a community manager for an ICO’s Telegram group. Their M.O. is usually the same – they claim to be famous YouTubers offering to help “promote your ICO” on their channels for a certain fee. They will then ask you to send them half of that fee upfront and the other half upon completion of the video.
When asked for a proof of identity, these scammers will offer to send you a screenshot of their YouTube channel’s dashboard, which, in their own words, “they can’t have it if they don’t own the account.”
One simple but highly effective way to peel off their façade and uncover their true nature would be to suggest for them to join you on a Skype meeting to “discuss the deal further”. These scammers will often give a variety of excuses, from “my schedule is very packed” to “I have to pick up my grandma at the cat clinic” to refuse the Skype call. However, if you insist on having the Skype meeting before proceeding with anything, they will leave you alone.
Take a look at this example:
A few days later, I decided to hit him up again, and much to my despair, he was no longer interested in promoting our client’s ICO on his channel. What a shame.
The Ponzi Scheme
One word – BITCONNEEEEECCT
Ponzi schemes have been around for years – from Charles Ponzi himself to Bernard Madoff and finally, to the MLM of Crypto, Bitconnect.
When Bitconnect (BCC) first launched their ICO in late of 2016, they earned a substantial amount of attention from the crypto community. Along the way, however, the company was also the center of much controversy and accusations of it being a Ponzi scheme.
Alas, Bitconnect’s inevitable downfall began when the Security and Exchange Commission (SEC) as well as the Texas State Securities Board (TSSB) ultimately lanced a Cease and Desist order against Bitconnect on January 4, 2018. The firm eventually shut its doors, causing thousands of investors to lose over $2.5 billion worth of investments.