More Scammers and Sad Stories – Avoid Crypto Trading Scams

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In today’s Money Morning…Bob got scammed…not your keys, not your crypto…anyone that says they’ll do it for you is not to be trusted…and more…

I feel like a broken record. But it’s in your own interests for me to bombard you with these kinds of essays.

Scammers are prevalent everywhere. In traditional markets and in crypto markets.

We’ve also been alerted this week to a scam email that’s being sent around that has my name on it!

It’s an email from an unknown company that has changed the sender’s display name to mine. But it’s not from any email we control.

They claim to have given you special access to a, ‘revolutionary cash-generating software’.

Let’s be clear, that is not something we do, I do, or have anything to do with. The links take you to scam sites that try to hook you into some kind of (typically) crypto-related trading network and software. Sometimes it’s stock based as well. Either way if you get anything like this purporting to be from me, it’s not.

And if you’re not sure, then send it to us at Attention it ‘Sam Scamwatch’ and I’ll check it out and let you know. And if it’s bad enough we’ll warn others of it as well.

Now sadly, that’s not our only encounter with scammers this week.

Bitcoin buyer’s guide: everything you need to know to buy your first bitcoin today

Bob got scammed

We want to fill you in on a story that is sadly not uncommon in the crypto space today. We’ve written to you before about scams and frauds but it seems like there’s still plenty of people that fall into the trap.

The scammers are getting smarter, more sophisticated…and their grasp of the English language is getting better.

This story is from someone who messaged me on Facebook. I won’t give away their name, but I do want to share the story. And I’ll share it because I know you might have tried these things before, or if (hopefully) not, there’s a good chance you’ve seen these things advertised and you maybe know someone who’s used them or is thinking about using them.

What’s worse is I know from a couple of years back during the 2017 boom, a number of people that swore by the success of these scammers. When in all reality they were (are) getting fleeced by what is in effect multi-level-marketing scams and Ponzi schemes.

The story I received this week starts with ‘Bob’.

Bob messaged me as he’d seen one of our videos talking about cryptocurrency. We’d obviously been talking about the underlying blockchain technology that many cryptocurrencies are built on.

As you’re aware, on a blockchain every transaction is visible. That means if we send you ‘Crypto X’, that transaction will show up on that particular blockchain. However, it also means that there are no personal identifiers in that transaction. There is simply the sending wallet address and the receiving one, along with a transaction hash that identifies the movement of the cryptocurrency.

In that way blockchains are pseudo-anonymous, but forever, immutably recorded on a blockchain.

As a result of this, one of the big growth areas in cryptocurrency and blockchain technology is blockchain forensics. That’s using track and trace techniques to try and uncover the actual users of particular wallets in the event those wallets are being used for nefarious purposes.

Bob was asking about the traceability of transactions on the blockchain as he had been a victim of fraud and theft.

He explained that he’d been with a company investing a significant amount of money with them, which would take care of his cryptocurrency trading. He noted he’d been with them for two years, investing both pension and savings. All up, Bob had put around $465,000 in with this trading company.

Now Bob didn’t go into much detail about what they’d promised. But he then went on to say something that clearly identified what this crypto company was. Bob said that when he asked to withdraw his money, he did not receive it. Instead the funds were stolen and he no longer had any access to them.

This is how these companies operate. They play the long game. They lure you in with promise of being able to generate huge returns for you. All you have to do is just fund your account with a little bit of money to start with.

They then call you most days. When you log into your account you see your balance increasing. You see gains being made…even in down markets. Soon enough with some astounding gains on the table, they ask you to put more money into your account.

At this point the numbers start to ramp up. Maybe $500 in the account to start with. Then they pressure you into adding $2,000. Before you know it, they’re asking for $10,000 or more to fund your account. All the while continuing to balloon the balance and build the excitement of this ‘no fail’ trading system.

What they don’t tell you is that you’ve transferred money into their control. They tell you you’re investing in cryptocurrency, but you’re not. Or even if you are, it’s their wallets and access they control. You can’t log in and then just transfer your crypto to another wallet — you don’t have the access.

And then if and when you actually want your money back, you typically can’t. They stop answering calls, or close down numbers altogether. They become inaccessible. Sometimes you’ll even have your access to the site revoked. But almost every time they simply won’t send your money back to your account.

Not your keys, not your crypto

Sadly with these kinds of accounts where you relinquish control of your funds, there’s little you can do. Often there is no wallet holding your crypto, and your funds are used to lure others into the scam.

There’s no way to trace the accounts because the wallets never existed. And as you don’t control the wallets, there’s no way to recover them even if they actually did hold crypto.

At best you can hope that police and digital crimes might investigate, but typically these scams are run from remote places dotted around the world with little legal recourse.

Let’s be super clear on something…

If you don’t control the private keys to the wallet holding your crypto, you do not own the crypto. There’s a saying, ‘not your keys, not your crypto’.

This is the fundamental way to help protect yourself from crypto trading scams. In our view, anyone who asks you to deposit funds into accounts they control is dodgy. This is an unregulated market with little to no supervision. There is no way that money is safe or protected, or you might never see it again.

Crypto is unique in that you don’t need to have someone else control your holdings. It is now easy enough to do yourself. And even if you think maybe just a few bucks into these kinds of companies can’t hurt, you are being taken for a ride.

If you want to invest and trade in crypto — DO IT YOURSELF. Anyone that says they’ll do it for you is not to be trusted. And if you’re not prepared to put the time and effort into learning how to do it yourself, then it’s not the investment marketplace for you, look elsewhere.


Sam Volkering,
Editor, Money Morning

PS: Want to learn how to buy crypto? Download this free report for everything you need to know

About Sam Volkering

Sam Volkering is an Editor for Money Morning and is small-cap, cryptocurrency and technology expert.

He’s not interested in boring blue chip stocks. He’s after explosive investments; companies whose shares trade for cents on the dollar, cryptocurrencies that can deliver life-changing returns. He looks for the ‘edge of the bell curve’…

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