Cryptocurrency scams are rampant.
Think about the many fake ICOs, unregulated exchanges, paid online shills, and celebrity Twitter impersonations.
It seems everyday there is a new hoax and with that comes a lot of duped investors.
I fell victim to one myself.
In early 2018 I participated in a Telegram group, discussing promising crypto projects and upcoming ICOs.
The TG group was started by an entrepreneur who posted regularly on the blog about his online ventures, the most profitable of which being ICO investing.
He turned a five figure investment to eight figures in about a year just from investing in these startup projects.
Some of the most successful ones he participated in included AION and ICON, both returned over 100X from the ICO price.
He was also very knowledgeable in the tech side of cryptos and explained hard concepts in layman terms.
I viewed this guy as an expert and followed him religiously on his blog and his Telegram group.
I subsequently became a regular participant of the TG group.
At this point I feel like I developed a friendship with some of the members and even know some of them on a more personal level. I trusted these people and a lot of them gave really good advice and shared information freely.
One day a member in the group posted a link to another Telegram group that was holding a giveaway.
I thought this is great, what a wonderful group of people that looked out for one another.
It certainly didn’t seem suspicious as a lot of projects encourage use of their network by giving away tokens or have an airdrop, where participants receive free cryptos.
Bounties and faucets are common as well where community members would be given tokens for creating buzz about a project, through social medias, like Twitter and Facebook.
However, this “giveaway” was different in that I had to contribute ETH and in return I would receive a certain amount of the project tokens.
To encourage higher contribution there would be additional bonus tokens if more ETH was sent.
The token that they were sending back to me was supposed to be already traded on the exchanges — Primas.
At the time Primas was traded at around $0.60 per token.
In exchange for the 11 ETH, which at that time was valued at just over $6,000, I would be receiving back 27,000 of the Primas tokens, then valued at $16,200.
It seems like an incredible offer so I sent over 1 ETH as an initial test As expected I received back some Primas, around 2,500 total tokens. I thought to myself, “It worked. Great! I just made some money”.
I then proceeded to send another 10 ETH to the smart contract and subsequently received 28,000 more Primas tokens. “Wow, easy money”, I thought, at this rate I will make up for all my previous losses in no time.
I decided to sell some of these tokens on the Gate.io exchange before adding to my my current pile of Primas, which in hindsight I’m glad that I did.
When I transferred the Primas tokens to the exchange it was supposed to appear in my account after a few confirmations. This can take upwards of a few hours.
Waiting wasn’t a big deal since I just made about $10,000 I figured.
My strategy was to cash out the Primas for some fiat and then rinse and repeat the process. Who said you can’t make money in this bear market.
I was convinced that I have found an incredible opportunity to making a lot of money quickly.
However, the wait turned from hours into days.
I did a little research and found that some users had similar delays and the funds just sometimes take longer to appear in the account. I wasn’t worried, seeing that my issue was not unique.
After a week, I started to get a little anxious since there can’t possibly be a reason why it would take this long.
I immediately contacted technical support on their web site and after a few long hours they responded.
I was told that the Primas token that I had deposited into the exchange was not the same as the ones that are being traded on the exchange. The token contract address was different.
I thought to myself, “this can’t be right, it must be a mistake. Let me just reach back out to the Primas Telegram group”.
I immediately went back to the TG group and approached the moderator.
I explained that the tokens I received weren’t the same as the ones that are being traded and are not the actual Primas tokens.
The moderator initially showed concern and after couple of messages back and forth he said he was going to escalate the issue to his superior.
He said he will fight hard for me if I send him 5 ETH as compensation.
My whole demeanor immediately changed and a rush of embarrassment and disgust filled my body.
At that moment, I knew I was being taken for a ride and just got scammed.
The scammer had started a Telegram group masqueraded as the official Primas group and sent fake Primas tokens to unsuspected contributors.
After checking the smart contract address I saw that he had scammed many more people.
I reported him to the official Primas support and, as expected, they couldn’t do anything.
Unfortunately, the Telegram group is still available and even though I have flagged the chatroom many times it is currently open to visitors.
It is fair to assume, with the anonymity of cryptos, there is really nothing anybody can do since the identity of the scammer is nearly impossible to uncover.
I just had to write off the money stolen as an expensive education.
However, with any good lesson there are always important knowledge imparted.
Greed, For Lack Of A Better Word, Is Good
Actually, not in crypto! Gordon Gekko can’t be more wrong.
Greed, or its ugly twin, FOMO, can get you in trouble. I didn’t hesitate to send ETHs over because I saw the opportunity to make a lot of money quickly. It seemed like a no-brainer, which brings up the following point.
If It Sounds Too Good To Be True, Most Likely It Is
This common mantra is true with most things and cryptos is certainly not the exception, rather it is the norm. If any giveaways sound like a deal of a lifetime think twice because there are a lot of bad people out there looking to take your money.
Since the space is still very nascent scammers are finding innovative ways to dupe the unsuspected or novice investor.
Giveaways or airdrops should never require funds from you to receive tokens back in return.
If there is a tier structure where the more funds you send the more, proportionally, you get back in return it is usually a clear sign of a scam.
Cryptos Are Real Money
Don’t send ETH to anybody unless you know for sure who is on the other side receiving it. Treat virtual currency like real money because it is.
Sometimes we are caught up with the notion that digital money is fake money or of lesser value than fiat and because of this most are more willing to spend it without thinking twice.
You need to view every BTC or ETH as hard earned money and guard it diligently.
Discriminate
When it comes to cryptos it is best to discriminate and treat everybody as a potential thieve, especially if you just met that person online.
Remember, anybody can join a Telegram or a Discord group so be wary of who you are chatting with and what they are posting, especially if you see that they are advertising links to another chat, forum, or web site.
Practice Common Sense
Sometimes it is easier said than done but just ask yourself if what you are doing is intuitive, logical, and safe. Always err on the side of caution, it is always better to have a missed opportunity than money lost.
Conclusion
I hope you guys learn from my mistakes, especially those that are new to the space. If only I was told of these traps in the beginning I would not have lost so much money.
Out of my misfortune I hope to see a positive outcome.
That is, you will learn to protect your assets and minimize any losses due to scams.
Rather than be scared out of cryptos because of the lack of security my wish is for you to be well equipped and educated and help spread the good that cryptocurrencies can do for the world.
Have you ever fallen victim to a scam? If so, what kind and how much money did you lose? What lessons did you learn? Please let us know by commenting below.
