It’s Halloween! So, it’s time to remember that crypto may also be scary. This is still the wild west of economics, where almost anything can happen —from the best to the worst. Like losing life savings to crypto. The latter could seem unpleasant, but it’s probably a necessary pain to learn some valuable lessons.
The fake investment on LinkedIn
What comes to mind when you think of LinkedIn? Perhaps, the least that goes through your head is that it’s a nest of cybercriminals. According to the FBI, this platform is the ideal place for malicious people to steal your funds.
A friendship on LinkedIn led Florida benefits manager Mei Mei Soe to lose the savings she had built up in crypto.
In December 2021, Soe hooked up with someone whose profile said he was a manager at a Los Angeles fitness company. The friendship started on LinkedIn and then moved to instant messaging. She told CNBC that she had been intrigued by his offer to make money. Although she didn’t trust strangers, the scammer gained her trust in the following months.
Soe started with a $400 investment when his new friend showed her some pretended proof of his earnings. Later, he convinced her to move her investment to a site he controlled. But after nine transactions that included loans from banks and friends, Soe realized that she had lost the entire $288,000.
Sadly, Soe wasn’t the only one to lose some or all of her life savings in crypto, thanks to the actions of cybercriminals on LinkedIn. Thus, CNBC detailed other victims of this scam who lost between 200,000 and 1.6 million dollars.
The modus operandi
Sean Ragan, FBI special agent in charge of the San Francisco and Sacramento field offices, said the victims were not to blame. Instead, the agent believes that responsibility falls on the criminals, who find LinkedIn the ideal place to do their misdeeds.
To commit the crime, scammers pose as professionals with fake profiles and start small talk on LinkedIn messages before offering a hefty profit via crypto investment. At first, scammers direct users to legitimate platforms where they can invest their crypto assets.
But, over time, criminals convince their victims to transfer their crypto investment to illegitimate sites, and that’s when they proceed to steal their life savings. The victims claimed they believed the scammers because LinkedIn is a trusted business and commercial networking platform.
A trap for retirees
A common factor in these crypto scams that take away the life savings of their victims is the sum of the initial investment. For example, a man from Ireland recounted how he started by investing $250 in what appeared to be a legitimate business.
Initially, the man who preferred to remain anonymous did not see anything suspicious. He heard about the company through an advertisement with a couple of celebrities who attested to the legitimacy of the profits obtained.
The scammer convinced his victim by showing him an account on a trading platform where he could log in and view investments and transactions. Thus, he invested up to the total amount of his retirement. The investment came to a six-figure sum that he did not want to disclose, including his retirement savings and his entire pension sum.
Noor’s huge losses
Noor is the pseudonym of a 30-year-old designer from London. Unfortunately, she also lost her life savings plus some profit she had made from crypto trading.
It was 2020, and Noor was tempted to invest in Bitcoin. She had never heard of cryptocurrencies before. Like many, she made short-lived gains from the bull market. But, she didn’t educate herself on managing investments effectively.
She used about $21,500, including her Bitcoin earnings, to invest in other crypto assets. At that point, Noor was not interested in the legitimacy of the invested projects. Instead, she joined communities on Twitter, Discord, and Reddit – including WallStreetBets. She also followed channels on YouTube that talked all day about crypto topics. Thus, her daily life was soon based on sleeping with the phone under the pillow to always be aware of the market.
And while Noor breathed crypto, she didn’t know what she was doing. Finally, Noor realized she didn’t have enough patience to make investments, and all she had done was get carried away by FOMO.
As everything falls under its weight, the Londoner lost a large sum of money, including her initial investment and any profit she might have made.
The infamous Terra crash
Terra’s collapse is pretty well known. You’ve probably already heard about how Terra’s ecosystem went from worth around 50 billion to a tiny fraction of it. Unfortunately, some people over-relied on the stability of this crypto and lost their life savings.
Unlike Noor, Yuri Popovich was a Ukrainian who put his family’s money on Terra to protect it from the ravages of the war on their country’s economy. He wasn’t a speculator; he just wanted to be cautious. But, unfortunately, the collapse of the so-called stablecoin took almost $10,000 and some of his sanity. Sadly, he doesn’t know how to confess to his wife that his money is now worth less than $500.
History repeats with a Dubai resident who investi his salary and borrowed from his credit cards. Attracted by the 20% interest offered by the project, he converted close to $20,000 into the stablecoin. Later, he learned the hard way that you shouldn’t put all your money into a single high-risk asset like cryptocurrencies.
Also, he put his family’s money bet and, through loans, even invested money that he did not have.
A story with a happy ending
Not everything has to have a sad ending, the following scary story of people who lost their life savings in crypto took a satisfying twist.
We have all fantasized about returning and buying Bitcoin when it was worth just a few dollars. Just like Rhonda Kampert did in 2013.
This American invested less than $500 worth of Bitcoin when it was around $80. She spent some funds the following year and then forgot about it. Then, in 2017, seeing how the cryptocurrency reached $20,000, she tried to access the funds, but she realized that she had lost some access data and that it was impossible to recover it then.
With Bitcoin at $50,000 last year, Rhonda was determined to get the funds back and contacted a couple of crypto treasure hunters.
Rhonda trusted them, and they got back the bitcoins from her worth $175,000. As a reward, she paid 20% to the hunters and took out $10,000 to put her daughter through college.
Now she stores her bitcoins in a hardware portefeuille. Crypto assets have become her life savings for when she decides to retire.
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