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Anatomy of a cryptocurrency scam

practicalsecurity.substack.com

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Re: Anatomy of a cryptocurrency scam

#51

Post by atlex2 »

paulpauper wrote: post #26
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.

Yeah a fake livestream of Elon Musk or Mike Saylor still makes hundreds of thousands of dollars/day undetected and untraced, no FBI involvement or arrests at all, still going strong to this day. Why waste time with this crap.

Why does google video search still allow scam users to show up as ‘SpaceX’ on YouTube? Doesn’t YouTube have a unique username system??

Re: Anatomy of a cryptocurrency scam

#52

Post by lolinder »

nradov wrote: post #15
Algemarin wrote: post #13

Earlier quoted context omitted.

The dishonesty lies in obfuscating the actual odds of winning, making the honesty about the payout a moot point as it's not particularly applicable for most entrants.

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...

You made it look more prominent by linking directly to the tab that details the odds.

On mobile that tab isn't even visible when you load the page, you have to know that it's possible to scroll to the right in the tab bar. Otherwise what you see is the tag line "Imagine Winning $48 Million", details about when drawing happens, and a button that says "claim a prize" with an ecstatic man on a phone.

I will say that the government-sponsored lotteries tend to be less blatantly abusive than casinos, but I'm still very comfortable saying that they do actively work to inflate people's sense of the odds.

Re: Anatomy of a cryptocurrency scam

#53

Post by hamasho »

I recently watched John Oliver's video[1] about the "pig butchering" scam. It's a brutal scheme where scammers invest months in building fake relationships, gain a ton of trust, and then rob all of their money.

Even though I'm pretty tech-savvy, I'm not sure I could totally avoid falling for this. These scammers don't ask for money directly; they casually mention how they're making big bucks through crypto trading on some app. Naturally, you get curious about the app, but you're still cautious. Then you see it's got a ton of good reviews on the app store, so your trust increases a little.

You install the app, and it looks legit - like it was made by a solid dev team. It offers some limited-time crypto deals where you can't withdraw for a while. The victim invests a little, watches the crypto value climb, and sees their "money" grow on paper. So they put in more. When they finally try to cash out, they realize they can't. They panic and turn to their "romantic partner" for help. That's when the scammers and the fake app squeeze out the last bit of cash, claiming it's for taxes or fees, and they need to put some money. And the victim loses everything.

It's not unreasonable for the victim to think the relationship is real if they've spent months chatting and calling, sharing really personal stuff. Plus, the app seems totally legit, both from the store reviews and how it looks and works. I really hope these scams will disappear soon.

[1] https://youtu.be/pLPpl2ISKTg?si=15RzmtRGMpptF-Dv&t=539

Re: Anatomy of a cryptocurrency scam

#54

Post by pbhjpbhj »

Terr_ wrote: post #46
Algemarin wrote: post #17

Earlier quoted context omitted.

> 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?

If it's not a picture of food cooked by a worker at the company, in the regular kitchen, with the normal ingredients then surely it's fraud (lying to get money)?

Market capitalism needs truth and transparency to have any chance of optimising delivery of goods/services. These should be preeminent goals of Western Capitalism.

Re: Anatomy of a cryptocurrency scam

#55

Post by jwrallie »

isawczuk wrote: post #9

If it was not a scam, you are ok to steal someone's savings. Maybe those type of scams are instant karma?

It reminds me of a scam they tried with my mom: and old person that apparently cannot read asks you about a lottery ticket, another “random” person comes and checks the lottery results from their phone, and you have a winning ticket for millions in your hand. Old person says it is hard for them to do cash it and asks for help, the random person pulls you in a corner and says you could offer some money to buy the ticket and cash it.

Well, mom was naive enough to believe it but honest enough to reject it.

It flips the who is scamming and who is the scammer around so that you think you are the one getting an advantage, much like here where you would withdraw some money that clearly is not yours. Much less likely to report.

Also makes the scammers feel less guilty when you also tries to scam another person.

Re: Anatomy of a cryptocurrency scam

#56

Post by roenxi »

Terr_ wrote: post #29
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.

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…

There isn't really a distinction between the two; they are the same sentence with different frames.

However, if you don't let smaller players into the market then they'll be fleeced using some other mechanism (for example, taxed and then handouts given to the wealthy). If access to markets is expensive then small players won't be able to save at all since any method that lets people invest exposes them to risk, and once risk is involved larger players will outmanouver smaller ones.

Damned if you do, damned if you don't but giving people easy access gives people the best shot at achieving prosperity.

Re: Anatomy of a cryptocurrency scam

#57

Post by yieldcrv »

lolinder wrote: post #48
yieldcrv wrote: post #38

Earlier quoted context omitted.

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…

Its not important and I didn't say the reasoning was good, you’ll just be hard pressed to get that level of validation from any provider until that intermediary space gets more regulated

In the mean time there are a separate category of people that take advantage of that structure, resulting in a high cost low trust environment, where people are willing to take gambles anyway, as the upside is always additional liquidity

Re: Anatomy of a cryptocurrency scam

#58

Post by lolinder »

yieldcrv wrote: post #57
lolinder wrote: post #48

Earlier quoted context omitted.

> 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…

Its not important and I didn't say the reasoning was good, you’ll just be hard pressed to get that level of validation from any provider until that intermediary space gets more regulated In the mean time there are a separate category of people that take advantage of that structure, resulting in a high cost low trust environment, where people are willing to take gambles anyway, as the upside is always additional liqui…

I think you're missing my point, which is that in the middle of describing an environment where you can't be confident of anyone's honesty, you acknowledged that even the "legit" actors who aren't trying to scam you are trying to keep things a secret from their "community" so that it can appear to them that everything is happening organically.

What that says to me is that you're in a community of scammers, so it's hard to tell the difference between someone who's out to scam you and someone who's just out to scam some plebs.

Re: Anatomy of a cryptocurrency scam

#59

Post by yieldcrv »

lolinder wrote: post #58
yieldcrv wrote: post #57

Earlier quoted context omitted.

Its not important and I didn't say the reasoning was good, you’ll just be hard pressed to get that level of validation from any provider until that intermediary space gets more regulated In the mean time there are a separate category of people that take advantage of that structure, resulting in a high cost low trust environment, where people are willing to take gambles anyway, as the upside is always additional liqui…

I think you're missing my point, which is that in the middle of describing an environment where you can't be confident of anyone's honesty, you acknowledged that even the "legit" actors who aren't trying to scam you are trying to keep things a secret from their "community" so that it can appear to them that everything is happening organically. What that says to me is that you're in a community of scammers, so it's ha…

I understood your point was that all participants including the token creators are scammers, and I didn't entertain you on it, shifting away from the semantics of that word as its an impossible standard for people that want to navigate that space

There is more nuance to it than that. The exchanges themselves will revoke a listing if it leaks in advance, turning the entire community against the founders for failing to get a listing and the door to that exchange being closed forever. The founders dont want it to leak that they paid or merely engaged a consultant, as a well done marketing campaign and “organic” results are what attracts people. The consultants therefore wont reveal who they worked with. and even if they did the founders will deny.

Many immature economies and sectors are like this. Crypto consultancy scams are not different enough for me to treat it differently.

Re: Anatomy of a cryptocurrency scam

#60

Post by Calavar »

Algemarin wrote: post #39
Calavar wrote: post #28

Earlier quoted context omitted.

At a certain point it falls to personal accountability. A would be lottery ticket buyer can get all that info in 30 seconds by googling "How likely am I win to win the lottery?" If they don't do that, that's on them. Advance fee scams are different because 1) they are telling outright falsehoods and 2) they come cloaked in a broad variety of disguises, which means that a naive web search is not guaranteed to unveil t…

A user can just as easily identify a scam such as the one in this post by also taking 30 seconds to do a web search for some phrasing from the email. And "if they don't do that, that's on them"? This is victim blaming in both cases.

IMHO, if you don't spend one afternoon out of 365 in the year researching what to do with your money and you lose money as a result, you can't claim victim status. It's analogous to being out of shape because you never go to the gym. Good results take effort. It's not someone else's fault if you never put in the effort. And the effort needed to learn how to make sound financial decisions is actually a lot less than the effort of going to the gym every day.

To draw another analogy, let's say you don't max out the pretax contributions on your 401k even though you have the means to do so. There are tens of millions of people in this situation right now, losing thousands of dollars in potential retirement savings each year. Are these people victims too? What is the difference between them and people who view lottery tickets as an investment vehicle? In both cases it's a financial loss due to lack of research.

In any case, I suspect that most people who buy lottery tickets are doing it for the entertainment value (the thrill of gambling), in which case dropping $20 on a lottery ticket every week isn't much different than dropping $20 on the movies. It's hard to to call them victims from that standpoint as well.

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