Topic: Fake exchange scam in a kind of Ponzi scheme and high yield return (Read 262 times)

Well, scammers are getting wiser each and every day just to gain the trust of their prospect and any other means to get to their side. That's why we should not lower down our guard once someone that we don't know tried to interact with us especially when the topic they brought is all about the money or when there's a money involved.

As long as you know what to do you will never be a victim to them. We should guard our funds by any means especially crypto or Bitcoin and do not share your private keys because that's the very important key to your funds.

We would like to share two incidents here which could help our fellow newbies learn more about tactics which scammers use to scam them, so that these newbies get saved:

1. We got a message from someone saying they could list our token in their exchange. We knew he was a scammer but went ahead to know more. He sent us a link to login to that "fake" exchange with our credentials to apply for listing through their contact form and he assured that he will take care of the rest. We knew his old-school techniques and blocked him immediately.

2. In the second one, we saw a member posting their seed phrase in the main group chat. One of our mods saw it lately and deleted it. We later came to know that someone tried to "steal" money from that person's wallet by importing his wallet in theirs, but unfortunately, all the funds inside (as said by the victim) were immediately moved to another wallet by that scammer (the person who posted his seed). So, the person who wanted to steal that guy's money and had bad intentions, got scammed himself.

We request everyone to please stay safe from these scammers as they try new tricks every day to steal from innocent people.

Whilst there is obviously legitimate and scam centralized exchanges, what's synonymous about the two of them is that your funds is not in your control and even if the exchange is a good one, it can get hacked or experience one form of data breach which would result in users losing their funds or their data being exposed on the dark market, no matter the kind of centralized exchange you use, do not store your funds on it, and then again like you said it's best users don't even try out new exchanges that more often than not are controlled by scammers waiting for you to deposit so they can make away with your funds.

In a step to curbing all fraud and criminality elements of social media scam/Ponzi schemes, the government of Nigeria through it agency "Economy and Financial Crime Commission" (EFCC) has paraded some founders of Ponzi schemes.

What they do is to acquire sensitive information from unscrupulous individuals with a promise of high return on investment (ROI) and swept away their various accounts funds and valuables informations, some of them are hackers, imposters and scammers. Let's raise a campaign as against this inhumane act.

Yes, but not every DEX operates using a custodial wallet, the problem with DEX that operates in a noncustodial way is that they don't support every cryptocurrency thanks to wallets like trust wallet but if DEX exchange doesn't find a solution to the limitation there's no way we won't save our coin on CEX at some point.

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I also have a sad experience with an exchange name Chaoex which advertise that ICO on the forum, I invested in it keep the token on their site, I later sold it for USDT while waiting for the BTC market to dump to a certain price range but it sad that the exchange just shut down without a single notification.

That is why it is said to use hardware wallets instead of storing your coins on some exchange whether DEX or CEX because your keys are with the exchange and they only need them to make transfers of your funds to any other address and you will lost your funds.As a newbie we might get diluted to some fake exchanges also with some lucrative offers like premium prices and using some name of reputed exchange and who don't have knowledge of the market may deposit their funds to that particular exchange and then become victims of scams.



So just stay away from them as your funds your responsibility and take lessons from @OP post and try to avoid such things to be safe.

I wouldn't trust Binance either. Don't forget that they have a business to run. Not returning stolen or hacked coins could be a devastating blow to their reputation. They would lose more clients and money than the value of the coins they returned. On the other hand, returning what was lost is great PR.

I have used Binance many times in the past as well. I am not going to be hypocritical and claim I haven't. But they are a centralized exchange and we can see recently that they have started having issues with regulators all over the world. These problems are forcing them to implement stricter KYC procedures.

We should also never forget that CZ was interested in doing a rollback (51% attack) to revert changes on the Bitcoin blockchain after several thousand BTCs were stolen from Binance. This happened back in 2019 I think. People considering doing things like that shouldn't be considered trustworthy. 

The crypto industry is one that is highly plagued by scammers and I don't blame them so much for it. I might blame the. For the fact that, they choose the wrong way to utilise the long line of opportunities that it brings to the new world. Beginner crypto enthusiast are the once I blame the most. Most times, they get these advices, come across it but due to some reasons, choose not to practice what they've learnt, probably because they are so soaked into making money that they forget they've got to learn the trade. In cryptocurrency, security is a priority that shouldn't go beyond second if not placed at first.
Not your keys, not your coins.

To be honest most newbies don't know how Bitcoin wallet works. Even when I was a newbie I made the same mistakes. I thought only a Bitcoin wallet is like a coinbase or blockchain. I wasn't aware of custodial or non-custodial wallets. Even I wasn't aware what Ponzi scheme is. So hope this post will help newbies like helped me previously to understand about wallet and Ponzi scheme. I learned from the forum nothing is free in the world. So we should change our greedy behavior to avoid such as the Ponzi scheme. And we must learn where should store our funds. It's an important part of crypto.

newbies must learn a lot from the experiences of others and the problem that is currently happening is that many newbies and even seniors are still easily fooled by high yield returns. greed is still difficult to control by some people

Unfortunately scams like this will forever occur because we keep having newbies everyday and newbies are always in rush, their motto is try first learn later, honestly people love learning the hardest ways

The funniest thing about all this scam, people will still fall victim of it and all this things happen are things that are not new. We get   stories about scam daily, but because of serious taste for making    money so fast it so sad to see people participating in all series of Ponzi scheme.

There is a word to remind investors: You want his high profits, but what he wants is your principal.

Any high-yield investment must be accompanied by high risks.

Liars are very shrewd and will catch our minds and lead us into traps, but as long as we are not greedy, we can avoid them.

The best exchanges in crypto space today are all centralised exchanges but one thing is certain about them, they are here to progress with crypto mass adoption, even if they have access to keys of all wallet addresses on their platforms they care about their users fund, newbies are the ones that need to stop using crappy exchanges that no one knows anything about

Recently, one of my circle of acquaintances also fell for the bait of scammers. Finding a "lucrative" offer on the Internet to increase his capital, he laid out to the scammers not only everything he had in fiat but also sold the apartment. As a result, the woman was left with the child on the street. No legislation wants to help her now.
This is not related to cryptocurrencies, but any promise of good money always involves fraud. I was surprised that she believed scammers from a country that is very far from her place of residence. People with such a stereotype of thinking necessarily become victims, as they believe that someone owes them something.

Newbies of cryptocurrency should just make things very simple for themselves. They may not be fully aware yet of the bolts and nuts of cryptocurrency but they should adopt very basic security rules right from the start.

One of which is to avoid high-yield offers. They should as well be aware right from the start that exchanges are not places to store funds. In short, newbies should always take note that (1) crypto is not a get-rich-quick scheme and that (2) private keys should be under their sole control.

I guess these are enough for a start pending further research and exposure. 

when human greed works, not much is thought about keys nor is research done. fraudsters always go to that card.

new big scams are appearing more and more often, why we don’t have as much news about catching perpetrators? Or did I miss something?

This is why it is advisable to use trustworthy exchanges. Though we don't know how trustworthy an exchange is up until it pull off their scheme. But just like Binance, they have insurance for their users. So for me, that's one assurance that you can trust this platform. But for others, especially new crypto exchanges offering very good returns or offers, think why they are offering such. They have ill intentions in the first place, attracting gullible users for the hope of getting high profits.

There are simple rules which one could follow to protect themselves and their funds from majority of threats;
• Not, your keys, not your coins,
• Verify, do not trust.
If one takes their security very serious and view every prospect as a scam until proven otherwise, it would be much easier for them to protect themselves from scammers.

But more people keep flooding to centralized exchanges as it seems more convenient and frees them of all responsibilities.

Although, this is not new, but new to newbies and people that have not yet got much experience about Bitcoin, cryptocurrencies, wallets, exchanges, and any other thing related to cryptocurrencies. Scammers always deploy a professional but malacious tactics, one of the first thing to know about Bitcoin is to have your own private key, even the seed phrase generated by noncustodial wallets give access to the corresponding private keys which is the reason private keys and seed phrase must be protected, if compromised by attackers, it will only lead to coin theft and loss of crypto asset.

People making use of exchanges do not have their own key
Even making use of a legit exchange does not mean you have full control over your own funds, the private keys of your addresses on the custodial exchanges you are using belongs to the exchange owner(s), which means you are not the owner of the private key and address on the blockchain where Bitcoin is stored, that also means you have no full control over your own funds. There are cases of exchanges freezing accounts which can range from stupid reasons like linking your transaction to a gambling site to some other reasons like stolen funds or fraudulent transactions which the person may not even be a fraudster.

Scammers are using this means to scam people
Some people do not know they have no full control over their own Bitcoin and other crypto assets on centralized exchanges and other centralized services. I read a news today about crypto scam in Australia . It is the scammers that setup the exchange, they have the private keys to the addresses generated for the victims, the victims will send Bitcoin or any other coin into the exchange account, thinking it is his/her account, but what will later result is the scammers that setup the exchange that have the private key that will spend the funds, because they have the private key and they are able to control the funds.


Scammers luring victims with Ponzi scheme-like tactics
What is really surprising me is that the scammers will first operate the exchange in such a way that it is legit, lure people to invest promising them a high yield return. This can result to victims encouraging other people to make use of the exchange and earn while investing, and the more the victims making use of the exchange until it finally result to exist scam. People should be careful of fake exchanges.