Cryptocurrency Scam Operator Confession: I Am Making Money Through "Legalized Robbery"

Original Title: Crypto Scams (Full Episode) | Trafficked with Mariana Van Zeller | Nat Geo

Original Source: National Geographic, Youtube

Original Translation: Deepflow Tech

The Shadow of Dubai: Confessions of a Scam Mastermind

In a luxurious villa on Dubai's Palm Jumeirah, a mysterious figure sat down for an interview. This villa rents for up to $15,000 per week, and the sunlight shone on his $250,000 worth of jewelry, sparkling through the floor-to-ceiling windows. With a casual tone, he stated, "This is a legal way of stealing." There was a disturbing sense of satisfaction in his demeanor. Known as "Mr. X," this cryptocurrency scam operator calmly described how he could design a scam to defraud tens of millions of dollars in just 15 minutes, as if discussing the most ordinary matter.

Through this exclusive interview on National Geographic's show "Trafficked," host Mariana Van Zeller revealed an unseen side of the crypto world — the tactics of scams that bilk billions of dollars annually from unsuspecting investors. From the masterminds behind the scams to the devastated victims and the FBI agents working to combat such crimes, this episode paints a panoramic view of the harsh reality behind the largely unregulated digital wealth era.

Key Interview Highlights

Mr. X (Scam Operator)

"This is a legal form of theft. This is a legal way to make money."

"A successful marketing campaign, promoted by multiple Key Opinion Leaders (KOLs), can easily earn around $69 million."

"In Dubai, we know privileged people who can help us get out of trouble. There is no litigation here, and we can get away with a lot of things."

"That's because their minds are weak. Do not invest money you can't afford to lose, understand? Who would do that?"

"If you're going to put your life savings into a token without even doing a 5-minute Google search, I think they are the dumbest people on earth."

「How were we caught? Who is going to catch us? The Crypto Police? No one is going to help those investors.」

Robert (Crypto Advocate Turned Victim Turned Vigilante)

「When the dust settled, I was left with only $86. The feeling is indescribable, it's emotionally devastating.」

「We may have saved thousands of people from losing millions of dollars. But it's not easy, we've even received death threats.」

「We monitor newly launched tokens, looking for signs of suspicious activity. For example, when you see a token drop 85% in 24 hours, but only 3% in the past hour, that usually indicates someone is dumping a large amount.」

「A legitimate project will go above and beyond to prove the security of funds to investors, not dodge the issue.」

「When a project's developers get defensive when questioned, or outright remove questioners from the chat, it's almost certainly a red flag for a scam.」

Xavier (Cryptocurrency Enthusiast)

「It's surprising that so many people can do this and still get away with it. I personally know people who have lost their life savings because of this.」

「I've been scammed 7 to 8 times myself, first investing $500, then losing nearly $10,000 the second time.」

「People don't like to read, don't like to research, they just blindly follow, following influencers on social media.」

「In the decentralized finance world, there are no rules, no protections. When you're scammed, you just have to chalk it up to a loss, there's no way to recover the funds at all.」

FBI Representative

「We do hear a lot about the gray areas and undefined areas of cryptocurrency, saying it's not money, so currency rules don't apply. But when an individual invests under a specific promise and those promises are not kept, that's fraud. Fraud is fraud.」

「We often find that new technologies are often first adopted by predatory individuals. Over the past year, we've seen exponential growth in cryptocurrency-related fraud.」

「People often say the FBI always gets their target, whether it's today or tomorrow. Those seeking to harm our system should always be on notice because we are watching.」

Basic Principle of the "Rug Pull" Scam

Mariana: Could you explain the operating mechanism of the 'Rug Pull' scam?

Xavier (Cryptocurrency Enthusiast, the initial explainer of the scam to host Mariana in the show):

Let me explain how this scam works using a margarita analogy. When we launch a token, let's assume it's a scam token, the scammer has already bought a large amount of this token at a very low price. As people start buying and the price goes up, the token's liquidity and value also increase. More investors will then come in, and promoters on social media will continue to hype up the project.

Regular newbie investors, seeing this situation, will think, "I have to get in now, it looks great, it's constantly going up, everyone is buying." And just as the token's hype reaches its peak, the scammer will execute a 'Rug Pull'—selling all holdings and crashing the price. That's the 'Rug Pull' scam.

It's surprising how many people can do such things and get away with it. I personally know some people who have lost their life savings because of this.

Mariana: How important is it for the average investor to understand this type of scam?

Xavier:

Extremely important. I myself have been scammed 7 to 8 times, investing $500 the first time and then losing nearly $10,000 the next time. That's the issue—people don't like to read, don't like to research; they just blindly follow the crowd and invest based on social media KOLs. However, in the world of decentralized finance, there are no rules or protections. Once you're scammed, you just have to accept your losses, as there's no way to recover the funds.

Insider Insights: Conversation with Mr. X

Mariana: Have you yourself been a victim?

Mr. X:

Yes, every cryptocurrency trader has experienced a 'Rug Pull.' So I thought, since this kind of thing happens, why not figure out how they do it and how to make money like they do.

Mariana: Why are you interested in this?

Mr. X:

Because this is easy money. This is Easy Money.

Mariana: How much can you earn in one scam?

Mr. X:

In one successful marketing campaign, through the promotion by several influential individuals, it's easy to earn around 69 million US dollars.

Mariana: Don't you think this is theft?

Mr. X:

No, this is a form of "legal theft." This is a legitimate way to make money.

Mariana: If this is legal, why do you wear masks? Why not do this openly?

Mr. X:

It's because my face is recognizable to many people. This is my promoter (Shiller), who has hundreds of thousands of fans and connections to celebrities. If recognized, it would end our way of life.

Mariana: What is your way of life like?

Mr. X:

Luxurious. We rent six villas in Dubai, each costing $15,000 per week. Our team of 20 travels together. The jewelry I usually wear is worth over $250,000. We drive cars worth hundreds of thousands, live in the most expensive area of Palm Jumeirah. Here (in Dubai), we know privileged people who can help us out of trouble. There are no lawsuits here, and we can escape many things.

Mariana: Do you feel guilty towards those who have lost everything? We've heard of people committing suicide due to such scams.

Mr. X:

That's because they are weak minded. Do not invest money you can't afford to lose, understand? Who would do that?

If you are going to put your life savings into a token but can't be bothered to do a 5-minute Google search, I think they are the dumbest people on Earth.

Mariana: Aren't you worried about getting caught?

Mr. X:

Caught how? Who's going to catch us? Crypto police? No one will help those investors.

We're not worried about the law catching up, it's not possible. It's almost impossible to detect where we are, and they can't trace us.

Mariana: Where do you spend the money?

Mr. X:

Investments, bank accounts, family accounts, people with legitimate businesses, shoes, clothes, designer brands, jewelry. I feel great, it's a sense of freedom.

From Victim to Vigilante: A Story

Robert (Crypto Scam Victim turned Vigilante):

Years ago, I was diagnosed with cancer, which gave me more time to slow down and focus on life, including investments. One day, my son came to me and said, "Hey, Dad, check out cryptocurrency." I began researching and invested some funds, which yielded good returns.

One day, I participated in a token launch. It had been delayed multiple times, the developers were young and not fully transparent. On the day of the launch, the developers dumped all their holdings, appearing to be a massive rug pull. When the dust settled, I was left with only $86. The feeling was indescribable, emotionally devastating. Knowing that others were going through the same situation, I felt I had to take action, and it had to start with me.

Now we offer bounties to encourage people to report suspicious activities. In the last 30 days, we have paid out around $17,500 in bounties. This money comes from our own token and funds our mission.

We may have already saved thousands of people from losing millions of dollars. But it's not easy; we've even received death threats.

Mariana: How do you spot a scam?

Robert:

We monitor newly released tokens for signs of suspicious activity. For example, when you see a token drop 85% in 24 hours but only 3% in the last hour, this usually indicates someone is conducting a massive sell-off. We enter their online discussions and "AMA" events, asking direct questions.

When a project's developers become defensive when questioned, or directly remove questioners from the chat room, it is almost certainly a red flag for a scam. A legitimate project will go out of its way to prove fund security to investors rather than avoid questions. We once had a request from an investor who put money into a project we confirmed was a scam, and we helped him avoid more significant losses.

Law Enforcement Perspective

FBI Representative:

The FBI has seen many cryptocurrency scams. We have indeed heard a lot about the gray areas and undefined territories of cryptocurrency, saying it's not money, so currency rules don't apply. But when individuals invest under a specific promise that is not fulfilled, that is fraud. Fraud is fraud.

We often find that new technologies are first adopted by predatory individuals. In the past year, we have seen exponential growth in cryptocurrency-related fraud.

Fraudsters engaged in "Rug Pull" scams must have internal justifications for their actions. It may be that they believe victims should be more cautious, or that they think this is how the technology operates, and the victims' lack of understanding is their problem.

The same argument might say: "Because I can enter your house, I can rob you." They are engaging in a criminal enterprise to deceive others out of hard-earned money. We will ensure these actors face legal consequences.

FBI Representative:

People often say the FBI will always get their target, whether it's today or tomorrow. Therefore, those seeking to harm our system should be vigilant at all times because we are watching.

Future Trends and Warnings

Mariana:

In mid-2022, cryptocurrency lost over $2 trillion from the previous year's peak, a phenomenon known as the "Crypto Winter." Predictably, investors became more cautious, making "pump and dump" schemes harder to execute.

However, as the market cyclically recovers, scammers are likely to resurface. As Mr. X put it, people are still investing in new tokens, and scammers will continue to steal their money, perpetrate fraud, and squander ill-gotten gains on gold and diamonds.

Xavier's Advice:

Do thorough research before investing in anything.

Mr. X's "Advice":

Do not invest money you can't afford to lose.

Key Insights

The allure of cryptocurrency scams lies in the promise of quick riches, attracting investors unaware of the complexity of this field ("I missed out on Google. I missed out on Apple. So I didn't want to miss out on this.")

Social media and celebrity endorsements play a crucial role in promoting fraudulent projects, with celebrities like Kim Kardashian fined nearly $1.3 million for failing to disclose promotional fees

Scammers are typically tech-savvy young individuals who turn a blind eye to the ethical implications of their actions.

The "wild west" nature of decentralized finance makes scam tracking and regulation particularly challenging.

Even during market downturns, scammers can still find victims, proving human greed and the enduring desire for sudden wealth.

Regardless of how the cryptocurrency market evolves, one clear fact remains: without full understanding and cautious investment, investors will continue to face significant risks. As emphasized throughout the program: "Do your research" and "Don't invest what you can't afford to lose."

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