Crypto Scams

Crypto Scams

"Any person or program that takes your money and requires payments of any kind to get it back is a scam.  Any person who endorses or supports such a platform or program is a scammer.  Just because YOU met the demands and received money does not stop it from being a scam, what of the people who cannot? Their money is lost to them forever and they have been scammed."
 
Popular internet investment scams.

1  High Return On Investment (ROI) SCAM

  • In this scam, someone on a social media site tells you they know about an investment with a great ROI. Often more than one person makes the same claim. And they can show “proof”.  It all looks good until it's time to collect.

    The parade of denials and extortion begins when it is time to receive the promised ROI. First is the denial reason and then the extortion remedy. The people who introduced you will tell you to just pay it so you can get paid. But it’s "PAY and PRAY". You pay up and pray they will pay you. No matter how many times you pay you may never get a penny. There will just be more denials and demands for more money.    

    It is fraud and extortion, but the scammers know there is no way to enforce the law on them. And the people who showed it to you will focus on you losing your money or getting the ROI, but they will never admit to the fraud and extortion.  

  • ***  more details ***
    Sometimes the investment provider can be at a Gmail address, a regular web site, or a group on a social media site like Telegram, WhatsApp, or Discord. They often take the name of a real group they are imitating, companies that would never be on a social media site pushing investment opportunities, and that do not know their names and logos are being used by these groups.

    All of those providers will say it is simple to join and there are no restrictions on getting your money or ROI. And If you ask for Terms of Service (TOS), there often are none.  They will tell you anything to get your money. And once you give it you don’t get it back. 

    The denial reasons are always things you were never told about: processing fees, trade margins, retainers, IRS fees, taxes, gross earnings fees, ROI release fees, late fees for not paying fast enough, or other invented excuses, known as undisclosed requirements, which is fraud. The names don’t matter. The money demand does, and as the ONLY remedy, it is extortion. Your fear of losing the money you have already put in is your incentive to pay again and ignore the illegality of it all.

    When you confront the referrers with the new demands, they will deny it is extortion or fraud. They’ll focus on telling you to just pay the money so you can collect your ROI, or asking you if you want to give up. And they will ignore everything else.


The following two descriptions share many of the same characteristics. They might not be a scam if the victim was truthfully told about what they actually need to have in order to succeed. But that information is never given ahead of time, causing unprepared recruits to end up with their money and earnings stuck on the platform awaiting the payment of money to be able to continue – money the victim doesn’t have and was never really explained to them in a way that they understand the real meaning or impact of what is being said. The schemes are explained below.

2. Work from Home clicking links SCAM

  • This work from home program involves clicking video links at any of many social media platforms. Each day a series of video links is given as part of a 20-task set. Typically, all but 2 or 3 tasks are clicking the distributed video links for $3-$6 pay for each click.  The problems are in the 2-3 tasks that are not clicking links. Those tasks are almost evenly spaced through the 20-task set after a few priming tasks and are designed to trap the victim’s money.

    For those tasks, the victim has to survive a series of hidden trades. There can be 1 to 3 trades, and they are all linked so that the victim has to do all of the trades presented. If they cannot, whatever they have used to buy into the previous trade(s) is stuck on the platform until the victim can do the outstanding trades, and the cost of that trade goes up.  If the victim can never raise the funds to complete the outstanding trade(s), they never get their money back.

  • ***  more details ***
    The victim is presented with the requirement to join a small group and do from 1 to 3 bitcoin immediate future contract trades. But the victim does not know how many or how much is required for each trade until the trade detail is presented, and they don’t learn that until after they have agreed to participate in the trade.

    The first trade task of the day is typically a single trade and low enough that the victim can handle it using some of their own money to their earnings. An analyst usually leads the group to success and the payout is reasonably immediate. But the victim just ends up spending all of that money and more on the next trade tasks.

    The 2nd trade task typically has 2 hidden trades, and the amounts of each are more than the victim has earned and already contributed.  The 2nd and 3rd trades piggyback on the first trade, so if they occur you must do all of them before you can collect any earnings. But the unknown trade amounts are high and get higher with each trade.

    As soon as the victim can no longer keep up with the money demands of the trades, they are kicked out of the group and abandoned and their money is gone, unless they complete the outstanding trade.


3. Work From Home Optimizing product

  • In this scam, the victim is told there is a work from home “job”.  The “job” is optimizing products using a working money account set up beforehand and clicking product links on their web site that deduct from that account and pay more back into it.

    The scam occurs because the working account balance is deliberately set up to go negative, causing the victim to add more and more of their own money to reclaim their “Earnings” that is mainly composed of their own money.  And when the victim can’t pay off their account deficit AND complete all of the tasks for that day, they never get their money back.

  • ***  more details ***
    The daily work consists of 3 sets of up to 40 clicking tasks. As the recruiter trains the victim the work looks simple and easy, and the working account rises, but somewhere during training the account balance goes negative. This is explained as receiving a “lucky task” that pays 10x more than normal tasks. The recruiter says, “You’re lucky. The task pays 10x more. And don’t worry, this is a rare occurrence that happens 1-3% of the time.”  

    But you can’t continue as long as the account balance is negative, so the trainer pays the deficit in the training account to allow the victim to finish the set. At the end of training, the victim hasn’t earned enough money to continue and earn enough money to withdraw, requiring them to add their own money.  The recruiter never explains that the training always comes up short and simply says “Just add the money needed to continue. And don’t worry, you’ll get it all back when you complete the day’s work”. 
     
    As an incentive to get the victim involved, an increasing large “daily pay” is chart is presented to them showing what can be earned independent of the work for each day consecutive day the victim “works”.

    It is impossible to get through a day’s work without running into a “lucky task” designed to cause your account to go negative. And If you do not have the required money, you cannot withdraw, collect any earnings, or continue working, and whatever money you have earned or added to your account is stuck on the platform.

  • While they claim the "lucky" task is rare the odds are that it will happen every day at least once. While the tasks are automatically assigned by their system and technically is rare (1-3% of tasks), but mathematically, the probability is more than 50% that a "lucky" order will appear, so it is not luck.  The math is right here:

    The formula for probability is:
    • The probability of an event occurring at least once in N trials is 1 - (1 - P)N  
      Where N is the Number of trials: N = 80 or N = 120 and P is the Probability range of the event occurring in a single trial: 0.01 - 0.03 (1-3%)
      • So, for 80 trials (N = 80) when P = 0.01, the formula is 1 - (1 - 0.99)80 , or approximately 1 - 0.449 = 0.551 (55%)
      • And for 80 trials (N= 80) when P = 0.03, the formula is 1 - (1 - 0.97)80, or approximately 1 - 0.085 = 0.912 (91%)
      • Therefore the probability range of getting a lucky order that occurs just 1-3% of the time in 80 tries is between 55 and 91%
      • And for 120 trials the probability is between 70.0% and 97.4

    • The math speaks for it self. It is more likely to happen than not. It is not luck when you get a "lucky" order. The system is designed to give you at least one "lucky" order every day. 

      That means your account will go negative every day.  And the more money that you have in the working account, the bigger the deficit will be when the account is clobbered by the “lucky task”.  

  • If the victim does not fix their account problem, eventually the account is closed and the money is lost, or the money stays on the platform indefinitely until the victim produces the money to complete all of the sets of the day. If the victim cannot get that money, they can never retrieve whatever is on the platform, making this a scam.

  • In actuality, a participant needs to have a reserve that is equal or greater than their account balance at any given moment or chances are they will fail and their money and effort will be lost to the platform. But this is never explained in a way the victim can fully understand until they experience the problem for themselves, and even they they may not fully understand, making this scheme a fraud.

 4. Scam recovery scams

  • These companies are all over the internet in every chat room where scams are discussed. The scam works by telling scam victims that their money can be recovered. Often the scam recovery company says there is no up-front cost, other times there is one. They even send emails saying the recover of the victim's money has happened.  But as time goes by, the victim of the scam is always told that they have to pay some money somewhere along the line before their money can be recovered. It's just another scam! It is usually starts as a few hundred dollars but over time becomes thousands as they keep coming back to say their efforts require a few hundred dollars more of your money. 
    But the likelihood that the money will ever be recovered is nearly 0 if there's any chance, and that is questionable. If no one can break into your crypto wallet then no one can break into the scammer’s wallet. 2FA, passkeys, and other authentication technologies practically ensure that wallets cannot be compromised, so how can you ever get your money back?

5. Coinbase Wallet App scams

  • Beware of anyone who wants you to use the Coinbase Wallet app to receive crypto. In this scam you receive crypto to your coinbase wallet. as either the result of an investment on another platform, or a "scam recovery" agent.

    The first problem is that you can't spend it.  The crypto is bound by a BNB contract. It's a scam! You have to contact some customer service person and pay a redemption fee of thousands to have the crypto "validated" or "released".  And you need BNB so send it anywhere.  There could also be a problem with the crypto itself, such that it is actually worthless.