How do Crypto Scams work?

#1

Hey guys,

 I just wanted to share a story. I moved to Mexico last year, and while I was there I ran into someone who said they invested people's capital and guaranteed a 15% return. How would a Ponzi-Scheme like this work? Haha I'm not trying to start one, I just want to know because he mentioned smart-contracts, but I had no idea what smart contracts were back then.

I think talking about Cryptoscams is important, so people can know what to look for.

Also, if anybody has a cryptoscam story to tell, I think that would be benficial to new people like myself.

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#2

pm me, i can write 1 for you

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#3

Crypto scams! I feel like itā€™s a badge of honour. A hallmark of initiation. If you havent been scammed can you really say you love crypto? hahaa! Iā€™m sure many here have stories for days. Most of them are essentially confidence tricks i think.

This example you mention. Without knowing much and just guessingā€¦ Iā€™d guess the most simple method would be for the individual to wax lyrical on the imutability and robustness of smart contracts. Ensure the numbers add up. Even if they dont look at what x project did, we only need to be x percent as succesful and youll be a gazillionaire etcā€¦ Either way as long as the dev/person leaves a hole in the contractā€¦ once he/she decides. Drain the contract. Vamoosh. Goodbye. Fin!

#4

I have one example I hope will save a lot of people unnecessary pain! Itā€™s usually related to HYIPS or Dirty Dapps.

Youtuber X ā€˜is your friend rememberā€™. Youtuber X continually points out the scammy nature of scams especially whilst pointing fingers at Youtuber Y & Zā€¦ Remember Youtuber X is your friend. Youtuber X has continually saved you money by pointing fingers and reminding you how unlike other Promoters/Youtubers Youtuber X is, Youtuber X has far more lucrative revenue streams than to even think of praying on others. Theyre all scamms Youtuber X will constantly remind you. But then Youtuber X suddently gets word from a trusted Devā€¦ Youtuber X doesnt know how long it will last and youtuber X will constantly re-iterate this because Youtuber X is your friend remember. You go in it pays out. 1week, 2 weeks. Then Youtuber X will let you know that the trusted dev has let them know there are problems. Waaay before any issues come to light. Because Youtuber X is your friend remember. Low and behold before you can break even the operation stops. But Youtuber X, who lead you in gave you the heads up so many still havent seen the hustle. Youtuber X from theyre referals likely made all their money back on day. So theyve been churning out profits for a good few weeks. Profits you cant hope to see. Youā€™ve probably been in their telegram or discord where they confided in you and let you know ahead of schedule so you dont feel hoodwinked. People fall for this over and over and over ad nauseum.

As I mentioned beforeā€¦ Iā€™m sure many have stories for days :slight_smile:

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#5

My family fell for that scam. They invest and the way it worked was that you invest $100 and theyā€™ll pay out 15% throughout the year so a monthly payment of $9.5 dollars every month for 12 months 9.5ish * 12 = $115 so the first month you would get the first payment which would make you more comfortable to send more money and thatā€™s when they stop answering or try to get you to invest more by saying that the payment shouldā€™ve gone through or that they need more time or money.
ANYONE that guarantees you an interest rate higher than I would say 3% (excluding government or government backed things, but then again they have their own problems) I wouldnā€™t even bother.
REMEMBER even securities, mutual funds etc. DO NOT guarantee you the % interest. They just have projected and tend to do ok to reach those projected numbers.

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#6

Iā€™m sorry to hear that @Aaron, these scams give crypto a bad name. Whenever I mention to someone that Iā€™m in the space they assume Iā€™m a drug dealer or scamming. Then they bring up how different exchanges were hacked and thereā€™s no FDIC insurance blah blah.

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#8

@blockchainuser

Lol I can relate to the YouTuber X story but within a different industry. I guess we have to come to the conclusion that people are going to get scammed regardless, but those same people wouldā€™ve been scammed by cashing echecks that got from a guy on Facebook bragging about ā€œFlippingā€ $1000 into $5000.

ā€œA fool and his money will soon be partedā€

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#9

So true. But the wise were once fools!!

And in hindsightā€¦ some of us were young enough & foolish enough to be scammed when $50 was 100% of our money. Itā€™s many of the older generation with declining windows of opportunities to recoup substantial losses I feel for!

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