CRYPTO INTELLIGENCE SYSTEMTM
Zone 2
Fraud & Scams
Recognizing Classic Crypto Scams
How to help a friend who's caught up in a crypto scam
What you'll find if you do a quick search on Reddit for crypto scams is that a lot of headlines revolve around something like:
“Help, I think my friend's been involved in a crypto scam!”
OR
“Help, I think my friend's a victim of another crypto scam. What can I do?”
The crypto tax scam
There are so many stories and so many things to unpack, but I want to share one story in particular. Basically, this person is contacted by their friend on Facebook who says, “Hey, I need $2,000 because I’ve got to pay a tax so I can get some of my earnings out of a crypto app.”
This is one of the classic tales you'll hear about, where there's somebody who’s got money locked up in some type of an app or online account and they need to either pay a tax or pay some kind of a fee. There are all kinds of different terms used for this scenario, when basically they need to pay money to get money out – which is a major red flag – and should never happen.
Hitting up friends to pay bogus crypto fee
So, this person was asking for €2,000. The friend said, “No I'm not I'm not going to give it to you.” He was so concerned about his friend that he actually went to the friend's father and his network of other friends. He found out the guy had hit up basically everybody in his circle, asking for money. The dad of the friend actually gave money so he was very concerned, given that the father was in his 60s and could be using valuable resources from his retirement to help out the son who's involved in a scam.
Other friends had also given this person money. In fact, the “frantic” cause had escalated because that's one of the key things: Scammers like to use urgency to put their victims into a major panic.
Scammers like to use urgency to put their victims into a major panic.
Money requests grow frantic and dollar amount increases
Then, all of a sudden, the person was getting more calls from his friend. Instead of €2,000, now this person needed €7,000 because the pressure has been dialed up for them to deliver. Unfortunately, the thing here is that in many cases the person is too far gone. Convincing someone they're in a crypto scam is an exercise in futility. What's key is to get through to them as early in the process as possible.
Of course, you may not have that opportunity because it may be the first time you make contact with either offender or family member. They could be way down in the process already, but just keep in mind that the earlier you get them, you may be able to stop them. Sadly, the psychological twisting that goes on is incredibly powerful, so much so that from the very beginning, the person is unable to see clearly that they're getting tied up in this web.
Related: Top Crypto Fraud Risks and How to Avoid Them
Helping victims of crypto scams
As a Certified Fraud Examiner, it's gut-wrenching for me to see these people that are victims of fraud. I've actually been a victim of fraud many times inside and outside of crypto, so I am much more able to see this. I study fraud and I want to educate people.
So go to Reddit and just type this in and tell your crypto friends to do the same thing. If you type it in, you're going to see in other people's words these things that have actually happened and how these scams unfold. Whenever people type in, “Hey, please help…” - what you'll see is the responses are dialed in. They're like, “Yep, this is a scam.”
Unfortunately, if a crypto scam has happened to you, you’ll just have to write it off because you will not get the money back. The perpetrator and the scammer will not be brought to justice. That's the assumption you should make.
Crypto education is key. You've got to educate yourself and increase your fraud and scam intelligence.
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