The $8.5 Million Crypto Scam That's Destroying Ordinary People

Recently, someone from the state of North Carolina lost all of their savings to an online investment platform that appeared to be extremely legitimate.

This platform was not looking shady, It appeared to be a clean, professional investment platform with charts, dashboards, customer service options and a promise of steady returns from cryptocurrency investments, however, this entire fraud was created from scratch and did not exist anywhere except for on a computer screen.

About 8.5 million dollars worth of cryptocurrency was recently seized by U.S. Authorities in the Eastern District of North Carolina, which can be traced back to fake online investment platforms. They were very well-funded and very well-designed frauds that had been created to queue up unsuspecting victims.

What makes this whole thing even scarier than the fact that these individuals spent all of their hard-earned money on phony investments, is that these individuals didn't make a stupid mistake; they were just regular and curious people who didn't know what types of things to look for to help them avoid falling victim to a fake investment scheme.

Well, now you will.

How the Scam Actually Works

Understanding how to protect yourself from crypto fraud starts with understanding how it works. It’s the basis upon which you’re able to recognize fake platforms, which is the most important way to avoid being a victim.

Fake crypto exchanges or platforms look just like real exchanges or platforms and are created by registering domain names that might be only one character off from a real, trustworthy domain name, such as Coinbasse instead of Coinbase. Many people wouldn’t see the difference.

Once you load money into the fake platform, you’ll be able to see fictitious profits in your account and your portfolio will be growing, and you’ll feel very clever so you’ll send in more money, and possibly tell a friend about it. But when you attempt to withdraw your money from the platform is when the excuses will start surfacing such as “we have tax hold” or “there is a verification delay” or “you owe us a fee.” By the time you’re done with excuses, the platform will be gone and so will your money.

The FBI’s Internet Crime Complaint Center issued an alert stating that Americans lost $5.6 billion to cryptocurrency fraud in 2023 alone (no, this is not a typo, that is $5.6 billion with a “b”).

And the seizure by the US Attorney’s Office in the Eastern District is just the tip of the iceberg; they’ve only recovered $8.5 million.

Why Smart People Still Get Fooled

What is nobody willing to acknowledge?: Intelligence won't help you escape this.

These con artists apply psychological pressure techniques to get around logic. They build up urgency - "this opportunity ends tonight." They also establish socially accepted proof - fabricated testimonials, forged earnings statements, and even computer created videos of people who just don’t exist and endorse their scheme.

The most deadly weapon they have is the phrase “guaranteed returns” .

Listen carefully. There is no legitimate investment (crypto or otherwise) that can provide you with guaranteed returns. There is no such thing as bitcoin,

Ethereum or anything else giving you guaranteed profit, when an individual says you cannot achieve guaranteed returns through cryptocurrency, they are lying. Period. Even seasoned traders on wall street with years of investing experience will tell you, that you cannot find an investment that has guaranteed returns.

When you hear the word "guaranteed," that should be a red flag.

3 Simple Steps to Protect Yourself Starting Today

Here comes the part that really matters. That promise you read about earlier — that you won't become the victims next? Now we are going to show you how to protect yourself.

Step 1: Always Check The URL Before typing your password.

You should always go directly to an official website on the Internet by typing it in for yourself. Don't click on any links in e-mail, text messages or advertisements on social media—those could lead you to an incorrect or fake site. If you suspect a site is legitimate, you may want to bookmark it. Additionally, look for subtle variations in the spelling of the URL. All it takes is one letter wrong, and you will be directed to a false site that will capture everything you enter.

Step 2: Take The "Guarantee" Test.

If a platform, person, or advertisement guarantees you will receive a specific amount of return on your investment or that you will earn "guaranteed" cryptocurrency returns, turn around and walk in the opposite direction. This one simple rule could have saved victims from North Carolina millions of dollars, as "Guaranteed" should be viewed as a blinking red light that says THIS IS A SCAM!!

Step 3: Confirm Registration

Before investing any money into any investment platform, you should check to see if the platform has been registered with any Financial Authority in the United States. You can check with the Securities and Exchange Commission (SEC) through EDGAR, or look-up the firm using FINRA BrokerCheck, or check the CFTC's list of registered entities. If you cannot find the platform listed with any of the aforementioned authorities, then your money will be at risk from that platform.

So there you have three steps - Verify the URL, refuse to accept guarantees, and Confirm Registration.

The Bigger Picture You Can't Ignore

The seizure from the Eastern District represents a positive outcome. However, the amount of $8.5 million recovered from a total of $5.6 billion in national losses tells us something important: Law enforcement cannot rescue everyone. They are putting forth a huge effort, but are still being outpaced.

Your first line of defence is YOU!

That individual in North Carolina who lost everything? They did not make a lazy mistake; they simple did not have access to the knowledge that you have now — that's what makes the difference!

What to Do Right Now

Please share this article with someone you care about, whether that be a family member, friend, or coworker who has expressed interest in crypto, because those at highest risk are essentially unaware of these types of scams.

If you've already seen a suspicious platform or company, please report it to the FBI's IC3 at ic3.gov, as your reporting could lead to a seizure of assets that occur as a result of another victim's financial resolution.

You now understand the signs and what to be on the lookout for in your lifetime.

Do not allow yourself to be taken advantage of.