By Markus David
Director of Professional Services
Stephen Carr of Meaford, Ontario wanted to ensure that his nest egg would grow and keep him financially secure. However, he fell into a crypto trading scam that robbed him of $500,000. From having half a million dollars in life savings, Carr now has just a few months of cash to get by and has to sell his home – all because of a crypto scam.
Lured By False Promises
YouTube, a video-sharing platform with 2.5 billion users worldwide, is the go-to site for information and entertainment. However, it’s also crawling with crypto scams and fake schemes that promise the moon and the stars but end up robbing victims of millions.
Stephen Carr came across a YouTube video that guaranteed viewers that it could provide easy trading of commodities and cryptocurrencies. He watched this video and thought it was worth taking the risk. After all, he was only going to stake $250. Little did he know he would soon get lured into the bitcoin trading scam web and end up losing his entire savings.
Fake Trading Platforms Create a False Sense of Security
Carr thought the claims sounded attractive. The YouTube video made it seem so easy to make extra money. Staking just a few hundred dollars didn’t seem like a big deal. The trade seemed to turn out exactly the way the scam brokers predicted. The trading platform showed that Carr’s trade was profitable.
Little did Carr realize that this trading platform wasn’t a real one. All trading was entirely simulated. Often, these crypto scams attract inexperienced traders who lean entirely on the fraudulent broker. It often doesn’t occur to them to verify the outcome of the trades with data from a financial website. If they did, they’d realize the trading platform was fake.
When Stephen Carr saw these fake returns, he thought his trades were successful and the broker was making him money. Also, when he asked for his first withdrawal, the crypto broker granted it to him. This inspired confidence and made him feel that the broker was trustworthy.
This is a common tactic used by crypto scams. They will grant requests for withdrawals early on for small amounts of money. They may release funds just once or even twice. However, eventually, as the victim deposits larger sums, the crypto scam will show its true colors and won’t release funds without making excuses or charging crazy fees.
However, with the numbers showing that trades were in the green and after withdrawing a small amount of money, It’s no surprise that Carr decided to put more and more money into this fake crypto trading account.
Withdrawal Refusal and the Final Realization
Soon, Stephen Carr decided it was worth staking his entire life savings of $500,000 on these apparently winning trades. That’s when he began to realize what he was dealing with. When he wanted to withdraw some so-called winnings from these non-existent trades, the crypto scam broker replied that he would have to pay a $150,000 liquidation fee.
That sounds crazy, and it is. No legitimate broker would charge these phony fees. That’s the painful moment when Stephen Carr realized the truth.
According to Crypto Potato, Stephen Carr commented, “I got conned. In hindsight, I put a ridiculous amount of money and a ridiculous amount of trust in these people.”
Crucial Mistakes that Fed This Crypto Scam
We read stories like this and are justifiably horrified. How can the average person avoid getting conned by these types of crypto scams? It’s important to treat stories like this as cautionary tales that can instruct us on how to keep our money safe.
Not Researching the Broker
The first thing anyone should do before opening an account with a broker is to do thorough research on the broker. Check that they have a license that is first-rate and current. Look at independent verification that the broker is legitimate – not just anonymous reviews. Check on the regulator’s website that there are no warnings about the broker.
Believing Incredible Claims
No broker can guarantee returns. It’s important to internalize that. You’ll never find a legitimate and licensed broker that will guarantee clients will make a certain amount of monthly or yearly returns. Stay away from any broker that does.
Confusing Trading with Gambling
People usually suspect that crypto scams may be fraudulent. They don’t see a license, they don’t have any validation that this is a real opportunity. However, many future crypto scam victims will say, in effect, “what the hell?” They’ll stake a few hundred dollars and feel like if they lose it, no big deal. This is the attitude people have when they approach slot machines, not trading.
The trouble is, people will forget their earliest reservations once it looks like trades are winning. Like a shady casino, though, the machines are fixed.
Not Checking Out the Trading Platform
Anyone involved with online trading should be aware of the existence of fake trading platforms. Check that the broker has MetaTrader 4 or 5. This is a reliable platform, but also make sure the broker really provides it and isn’t just lying on the website copy.
Trusting the Broker After an Initial Small Withdrawal
People who run bitcoin scams know that victims can easily be lured into a false sense of security. All they need to do is to release a few hundred dollars. The people they are targeting would then think, “Oh, they’ve given me a withdrawal. They must be okay.” The intention here is to feed confidence, but that trust isn’t earned.
Accepting Any Excuse for Not Allowing Withdrawals
A broker should allow people to withdraw their funds. A crypto scam will find any reason to avoid releasing funds (unless they are trying to lure them into a false sense of security with minor amounts). The following are common excuses bitcoin scams use:
- Withholding for taxes
- Withdrawal fee
- The requirement to trade a certain amount before withdrawing
- To fulfill a bonus plan, minimum trading is required first
- Technical problems
- Withdrawals are only allowed if paid with a (useless) token or (worthless) alternative crypto currency
- Other types of fake fees
- Communication ceases and the broker disappears
Not Seeking Crypto Recovery Help Immediately
In the case of this crypto scam, certain victims claimed they went to the police, but there wasn’t anything that could be done. The reporters said that law enforcement is so inundated with fraud cases that it has no time to research individual cases. In addition, the international nature of crypto scams puts these cases outside of individual jurisdictions.
These journalists didn’t contact MyChargeBack. A firm like MyChargeBack is designed to assist you in your crypto recovery by communicating and educating law enforcement agencies to deal effectively with the international nature of bitcoin scams. We do in-depth research through crypto trace technology and bitcoin forensics. Then, we create crypto reports that our clients can bring to law enforcement to bolster their cases.
In addition, we investigate cases from all over the world. MyChargeBack experts deal with Interpol and other international organizations devoted to fighting fraud. It’s important not to get discouraged. Understand that crypto recovery is possible and contact MyChargeBack experts today.