How to Avoid the Crypto Scam

Four weeks ago, I sat across the room from a young woman who was just beginning to realize that the banking website that she had logged into five days earlier was not actually her bank, the text message that brought her there was that of a scammer, and the contents of her online bank account had been, by that time, entirely drained. Thankfully, in the weeks that followed, the bank was able to trace the digital footprints, tracking the movement of the stolen money. Because it never made it out of the Canadian banking system the fraud department was able to recover her funds.

Counter that with the man I spoke with last night. I sat across the table from him as he described how he lost everything to a crypto scam. Crypto was the scammers essential escape route from the Canadian banking system. The scammer had fooled this man into converting his money into crypto, and sending it to the scammer. And now his money is outside the reach of any banking protection, outside the jurisdiction of any law enforcement agency, and entirely irrecoverable.

But how did he fall for this?

I had seen another variation of this scam quite recently actually. A random stranger in a Twitter direct message sent me 0.79 Bitcoin. I recognized it as a scam immediately. No one sends free Bitcoin. But I wanted to see how the scam would play out, and in all the scams I’ve studied over the last few years, this one was new. 

I ran a sandboxed browser running in a virtual machine, protected with a VPN to hide my IP address. Upon visiting the site the scammer had sent me, I was shocked at how professional looking the platform was. This was no hacked together, poorly translated, obvious fake. It looked very authentic. It allowed me to enter the promo code provided by the scammer, and sure enough almost $15,000 of Bitcoin was “added” to my account.

And this is how they craftily gain the trust of their victims, and the con progresses. In these the most elaborate scams, the websites are almost indistinguishable from legitimate trading platforms, even for a software developer like myself. Like an expertly counterfeited dollar bill, these websites exude authenticity, respectability, and trustworthiness, to the detriment of their victims. Clearly millions of dollars are being spent developing these tools to ensure these scams look legitimate. This is the work of a global crime network. We’re no longer dealing with the amateur telemarketing scammers that we all have laughed at on YouTube, exposed by “scam-baiters”.

The true nature of the scam became obvious when the platform would not allow any “earnings” to be withdrawn until I had deposited crypto of a minimum amount into the system. And therein lies their dependency on crypto. That is the trick, to get victims to convert their money into crypto, and once they do, the scammers run off with it.

And perfectly on cue, this man described to me how the platform took his crypto and within a month displayed $200,000 profit on his investment, but to withdraw it, he would need to send a “fee”, of course in more crypto.

Crypto is the mechanism of choice for these scammers. It provides a quick and efficient transfer of money out of the Canadian banking system, and out from under the regulatory protections therein. As soon as the money is moved into the crypto space, it is gone, in an instant. The victims may not even realize it’s gone, as the account balances reported on these fraudulent exchanges, are all part of the scam. But in reality, the dollars have departed for a place where law enforcement has no jurisdiction, where lawlessness reigns. 

That is the selling feature for many who promote crypto, but they are unknowingly enabling these scams, and every dollar they earn in their crypto portfolio, is necessarily funded by the loss of these victims. Victims that are vulnerable to begin with. Victims that are older and inexperienced, some young and naive, some poor and desperate, some immigrants on student visas just trying to navigate a strange country and an unfamiliar language.

All this said, I am livid and feeling quite helpless, with a litany of “if onlys” to lament.

If only these victims had taken the time to research the underlying website, uncover the age of the domain name, and understood that a “financial institution” only a few months old is nothing more than a scam that has routinely been taken offline for fraud, only to resurface with a new name, maybe a new logo, and loading before them now.

If only these victims had known that they should never convert their money to crypto and then at the instruction of a scammer send it to their crypto "platform". The converting part has to occur on a legitimate platform, the sending part, is where the crypto becomes irrecoverable.

If only these victims had known that they should never need to send crypto as a prerequisite for withdrawing their “earnings” on a legitimate platform. This seems like common sense, but in the face of being told their tiny investment is now “worth” $200,000, and that they only need to send a “small” fee before they can withdraw their profits, all sense is easily abandoned, and they become willing victims.

If only these victims had recognized that a legitimate financial institution will not send you random Interac e-transfers. Or if only these victims realized that those e-transfers were actually from other victims, simply at a different stage of the scam. Or if only these victims knew that by sending those dollars to a crypto wallet controlled by the scammers, they are now unknowingly an accomplice, and that money is now gone forever as well.

If only. If only. If only.

The thing is, crypto IS confusing. But the confusing nature of crypto is a feature not a bug for these scammers, and as a result obfuscating the scam has never been easier.

But avoiding these scams isn’t actually achieved by overcoming this obfuscation. More knowledge, more expertise, more intuitive gut instincts is not the answer. No, the scammers will always come up with a new strategy, one more complex, more convincing, more effective than the last. 

This is because scammers understand there is something even more essential to the success of their scams than crypto. The technology may change, even improve to make scamming easier, but the success of these scams depends entirely on the timeless certainty of the greedy human heart. Without the expectation that scammers can leverage the allure of riches, these schemes would not work.

This desire for quick money, easy wealth, and the elation that fake numbers on a scam trading platform dashboard can stir up, is what compels these victims to engage in otherwise irrational transactions. 

1 Timothy 6:9 describes the fallout accordingly :

But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that plunge people into ruin and destruction.

The scam victims I’ve spoken with each share a sense of shame and regret upon learning that they were scammed. At this point in the scam, they have come to realize that they were willing victims. They made it easy for the scammers at the prospect of wealth. 

And we are all vulnerable to this risk. What masks itself as “financial prudence” in our society, and rarely manifests itself beyond a simple desire to be richer, lulls us into thinking that we are not vulnerable to this threat. It’s not as though we desire to be filthy rich. But that’s not what Paul warns against in 1 Timothy. It is simply the desire to be rich, which is to say richer than we currently are. And from this desire, all kinds of senseless and harmful decision-making flows. And it plays out predictably in every scam, and the scammers know the script all too well. Once a victim is enticed, common sense becomes an after thought. And only in the aftermath of the ruin and destruction does reality set in.

God’s Word has the only solution to guard our hearts against this vulnerability. By His Spirit, our hearts must be transformed, and our minds renewed in our attitudes and affections towards wealth. The one who is content with their current financial standing is not enticed by the allure of free money, no matter the quantity. And our affections for wealth will only diminish, as our affections for Christ increases.

Paul describes the secret to avoiding crypto scams, and he calls it contentment in the preceding verse when he writes :

Now there is great gain in godliness with contentment, for we brought nothing into the world, and we cannot take anything out of the world.

And Paul expands on this contentment a bit further when he writes in Philippians 4:11-13 :

Not that I am speaking of being in need, for I have learned in whatever situation I am to be content. I know how to be brought low, and I know how to abound. In any and every circumstance, I have learned the secret of facing plenty and hunger, abundance and need. I can do all things through him who strengthens me.

And therein lies the secret. No matter what life brings, good or bad, health or sickness, wealth or poverty, none of those things are the source of contentment. Christ is. And when He is your strength, when He is your joy, when He is your delight, these scams don’t mean a thing. There’s no allure. The trap has no bait. 

Be media wise, church.