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Anatomy of a cryptocurrency scam

practicalsecurity.substack.com

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Re: Anatomy of a cryptocurrency scam

#41

Post by grotorea »

jfengel wrote: post #30
grotorea wrote: post #19

Earlier quoted context omitted.

"You can't cheat an honest man" But there are plenty of cryptocurrency scams that don't require that. Just some place that looks like an exchange but is actually a money hole.

Yeah, that expression is how people protect themselves. "Of course you got hurt. You were dishonest. It therefore cannot happen to me." Honest people get cheated every day.

Oh sure but at least honest people can avoid being swindled by this stuff or falling for some types of pump and dump or pyramid schemes.

Re: Anatomy of a cryptocurrency scam

#42

Post by paulryanrogers »

pizzalife wrote: post #31
SkipperCat wrote: post #24

Earlier quoted context omitted.

One of workplace tragedy in America is how we moved from professionally managed pensions to individual 401k retirement plans. Most folks have no business deciding asset allocation, managing risk, etc.

Most 401ks will just default to a target date fund, which is usually a total market stock ETF + bonds. That will certainly perform better than most actively managed pension funds.

But worse than the defined benefit pensions that 401k's were leveraged to replace.

Re: Anatomy of a cryptocurrency scam

#43

Post by paulryanrogers »

paulpauper wrote: post #27
georgeecollins wrote: post #22

One thing I feel like I have learned from Reddit/ TikTok is the average person is terrible with money. Some VCs argue we should lower the bar to investing to democrative it. I am all for democracy, but maybe we would be better served if the average person didn't try to be a tycoon.

Two types of people: those who have money and those who have yet to be separated from it.

Aren't those one and the same group?

Re: Anatomy of a cryptocurrency scam

#44

Post by pants2 »

georgeecollins wrote: post #22

One thing I feel like I have learned from Reddit/ TikTok is the average person is terrible with money. Some VCs argue we should lower the bar to investing to democrative it. I am all for democracy, but maybe we would be better served if the average person didn't try to be a tycoon.

As it turns out, the accredited investor rule (>$1M liquid assets) isn't to filter for savvy investors, it's to make sure you can still land on your feet after your investment disappears.

Re: Anatomy of a cryptocurrency scam

#45

Post by greentxt »

Terr_ wrote: post #37
Terr_ wrote: post #29

Earlier quoted context omitted.

I think the tricky thing is the distinction between: (A) Democratization: Let everyone participate as individuals on a freshly equalized playing field that was previously so slanted they couldn't even try. (B) Democratization: Encourage lots of small disorganized weaker players into the market as unwitting prey for existing interests that have already established themselves with regulatory or competitive edges that t…

P.S.: A closely-related rant over another situation involving market-access and devil-in-the-details: Various attempts to "privatize social security" often with the pitch of "giving individuals more control." In this case I'm not focused on whether individuals can act wisely, but rather that such plans often means replacing an insurance policy with an investment account . Those two kinds of financial instruments have…

Well, if the privatized version doesn't allow other people to take my money away from me at the point of a gun and give it to other people, using the state's proverbial "monopoly on violence" it doesnt seem like a very fair comparison. Apples and oranges. Maybe that was your implicit point?

Re: Anatomy of a cryptocurrency scam

#46

Post by Terr_ »

Algemarin wrote: post #17
nradov wrote: post #15

Earlier quoted context omitted.

Where is the obfuscation? Most lotteries post the odds right on the main game page. What more do you want? https://www.calottery.com/draw-games/superlotto-plus#section...

> What more do you want? For it to be clear how unrealistic the odds are. They're not exactly broadcasting "you're 40 times more likely to be struck by lightning than to win the jackpot", instead their site screams "Millions Could Be Yours!". That is the dishonesty and obfuscation. Millions _could_ be yours, but they are very unlikely to be yours, in fact realistically approaching zero. While advance fee scams say "m…

> That is the dishonesty and obfuscation.

The problem is that no culture/philosophy has (yet?) even found a clean line.

Ex: How different must the fixed menu picture of the "Burger and Fries combo"--designed to manipulate me into feeling hunger--be from the real food before it's fraud? If I tell you "pink elephants", I have created text that placed an idea into your mind against your will, but is that an offense?

Re: Anatomy of a cryptocurrency scam

#47

Post by lofties »

nradov wrote: post #14
alwa wrote: post #10

Earlier quoted context omitted.

Although sometimes, rarely, the victim confesses their embarrassing actions as a warning to others in a well-written firsthand perspective in a national newsmagazine [0] [0] https://www.thecut.com/article/amazon-scam-call-ftc-arrest-w...

I doubt the veracity of that story. No real evidence, and it reads like a creative writing exercise. Did the editors even fact check it?

It’s nothing but scams all the way down.

Re: Anatomy of a cryptocurrency scam

#48

Post by lolinder »

yieldcrv wrote: post #38
smeej wrote: post #23

This is...not realistic on any level. I've been professionally investigating cryptocurrency scams/thefts/fraud since 2017. This is at least twice as convoluted a process as is necessary to separate people from millions and millions of dollars in cryptocurrencies if the site stays up for a week. People don't bother spinning up stuff like this when the easy stuff works just fine.

As a counterpoint it is very realistic. If you ever launch a token and run your own telegram channel, all sorts of specialists come out the woodwork with extremely convoluted schemes The sad thing is that the legitimate ones look just like the illegitimate ones My first top exchange listing was through a DM I’ve done partnerships with no name exchanges that turned out fine, also initiated over unsolicited DM been sca…

> both the legit and illegit ones have no references because their clients are all other token projects whose community needs to feel everything happened organically

I realize that you probably have no clue how this sounds, so I'm going to translate this sentence into how it sounds to those of us outside the crypto world:

> Both the scammers-of-normal-people and the scammers-of-the-scammers have no references because their clients are all scammers who don't want their marks to know that it's a scam

Please do correct me if I'm somehow misinterpreting the reason why it is so important to these "legit" contacts that secrecy be maintained lest their "community" find out.

Re: Anatomy of a cryptocurrency scam

#49

Post by Terr_ »

greentxt wrote: post #45
Terr_ wrote: post #37

Earlier quoted context omitted.

P.S.: A closely-related rant over another situation involving market-access and devil-in-the-details: Various attempts to "privatize social security" often with the pitch of "giving individuals more control." In this case I'm not focused on whether individuals can act wisely, but rather that such plans often means replacing an insurance policy with an investment account . Those two kinds of financial instruments have…

Well, if the privatized version doesn't allow other people to take my money away from me at the point of a gun and give it to other people, using the state's proverbial "monopoly on violence" it doesnt seem like a very fair comparison. Apples and oranges. Maybe that was your implicit point?

> Well, if the privatized version doesn't [risk loss because of] the point of a gun

Except it does. A soldier with a gun in your face can take your insurance payout just as easily as they can take your bank balance.

With respect to a kleptocracy, neither option protects you.

> take my money away from me

Ah, this is the place where you've confused an apple for an orange: The premiums collected for "destitute in a ditch" insurance is not "your money", because that's not how insurance works.

Similarly if you buy "house burns down" insurance and your house is fine until the day you sell it, then you get zero dollars back from the insurance company and nobody blinks an eye. Your payout is potential, conditional, and generally non-transferable, and that's normal, because an insurance policy is not an investment account.

There was never a discrete "your money" pile sitting around in the insurance-company vault waiting for you to reclaim it. (Well, aside from in the minds of criminals plotting insurance fraud.)

Re: Anatomy of a cryptocurrency scam

#50

Post by michaelt »

TheDudeMan wrote: post #6
wslh wrote: post #3

I suggest you the following exercise to see it with your own eyes: enter a Telegram channel on a top 100 cryptocurrency, say that you are trying to recover your wallet and... Suddenly a lot of scammer will contact you in less than 5' with techniques that you cannot imagine are real. For example, telegram handles with the same name as the channel admin but using unicode characters to make tou think it is the same acco…

What is the standard solution to this type of phish? This problem did not exist in the ASCII world, of course. Unicode is useful, but what is the best way to prevent this malicious use of it?

For web URLs, browsers will sometimes display "punycode" where for example "домен" would be represented as "xn--d1abbgf6aiiy"

I believe different browsers have different heuristics about when to switch to that representation - suspicious characters, mixing scripts in the same URL, and so on.

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