Many people are in crypto to potentially make money. However, the opposite happens sometimes and people lose money to crypto scams. So, we asked 5 people in our community who have fallen victim to these scams to share how it happened.
If you’re in crypto, you must have considered how much you could possibly make from it. That’s fair because making money can be “easy” once you get the hang of it. But you know what’s easier? Losing money. And the crypto market is no exception to this rule. Price movements and market volatility are two major culprits for parting you from your cash. However, there’s more to it. Crypto scams are also a thing, and if you’re not familiar with the space, you’re prone to fall victim to one. No one wants that, right?
Sadly, many people have lost their money to scams. It’s an unfortunate trend, but we thought we could dig into it in some way. So, we asked 5 people in our community who have lost money or their assets to these scams to share their experiences.
Read their stories below:
Hernadez*
It all happened so fast. Sometime last year, I wanted to sell some crypto and decided to use a group. The admin of this group acts as an escrow and temporarily holds the assets and funds until both buyers and sellers fulfil the conditions required for the transaction.
Well, I sent the coin to the admin and the buyer also sent the money to it. Neither of us expected what happened next: we were both removed from the group.
I should have seen it coming because the admin seemed too impatient. That was a red flag I should have paid attention to.
Abdul, 18
In April of 2022, I stumbled upon a Telegram referral bot that gave you $10 for every successful referral you made, i.e the number of people you invited to a group.
A little background about how I got here: I was broke and desperate for ways to make money from crypto, even though I was a beginner.
Anyway, I made 12 successful referrals and unlocked $120 in the process, which was also more than the minimum withdrawable amount of $100. This is where my naivete came in.
The admins of the Telegram group reached out and told me that I had to pay a transaction fee of 80 TRX ($7) before accessing my bonus. I weighed my options and figured that $7 was a fair price to pay if it meant unlocking $120. So I sent them what they asked for. I waited and waited, but I didn’t hear anything from them. After a few days, I realised what had happened.
$7 may not seem like a lot of money, but it was almost all I had at the time. But I guess I learned something from the experience too and now, the odds of falling for another scam are low. I now know what to look out for — for example, if a site asks you to do something irrelevant to gain a high amount of money in a short period of time, it’s most likely a scam. It’s a valuable lesson, so I’ll take it.
Tommy, 30
When I got into crypto in April 2021, I had zero knowledge of how it worked. I pretty much just downloaded Telegram and searched for crypto groups to join. Unfortunately, I joined the bad ones.
As soon as I joined these groups, I started receiving offers in my DMs to buy and hodl BTC. I didn’t know that for the most part, “legit admins never DM first”, so I was exposed.
These people posing as admins would offer me BTC and make it seem like they were trying to help me grow my portfolio. Their trick was to offer a discount if I bought large amounts of BTC. In summary, my brother and I “invested” about ₦450k in these schemes.
Why did it go on for so long? I kept receiving messages that I was part of an investors’ group that had the power to pump the prices of crypto assets. The anticipation of how much gains I could potentially make on my investments made me continue putting money into the hands of these scammers. Sadly, I didn’t make any profit or even recover my capital to date.
The worst part? 99% of the money I lost was borrowed from my business capital. It was a very tough time to navigate. I was crushed, to say the least, but I decided to stay back and really learn about the crypto market. My anger and frustration were enough motivation to consume crypto content on the internet and watch YouTube videos for hours non-stop. Before long, it started paying off and it still is.
I’m not an expert yet, but there are a few things I now look out for: if a project promises crazy returns, I’m out. Also, it could potentially be a red flag if the team behind a project is anonymous. Granted, no one knows who is behind Bitcoin(BTC). But not every project is like BTC.
Francis* (age unknown)
Last year, I bought the meme coin “AJE” during their Initial DEX Offering (IDO). At the risk of oversimplification, an IDO is a novel way for crypto projects to sell their newly minted tokens to the community through a decentralized exchange such as Uniswap.
This was the first time I was participating in an initial offering, and it was because I gave in to FOMO and the hype around the team’s marketing.
Here’s why it was a bad idea: I was a crypto newbie, and I invested my hard-earned $60 into the project.
After launch, the token lost value. However, it rebounded when it got listed on CoinMarketCap and my portfolio doubled.
I got greedy and refused to take out my profit or capital. Before I knew it, the coin started to dip again until I was down almost 75% of my investment.
Then I discovered that — and this was what made it a scam — the team was not serious about the project. When I finally decided to cut my loss and dispose of the tokens, I got only $25 for it.
Brian*
In October 2021, some guy came on to a crypto trading group to promote a project. I didn’t care much about the project, but I got carried away with the potential for mouth-watering returns. As a firm believer in the DYOR (Do your own research) mantra, I went against my own advice.
Curious about common mistakes beginners make in crypto? Let’s get you up to speed here.
I invested $1000 in the project — which turned out to be a crypto rug pull — and the money I put in went down the drain. That wasn’t all — a lot of people in the trading group also went in on the project and lost their money. The newbies on the group took the biggest hits emotionally because they were still trying to figure crypto out, and I had to pay some of them back so they could continue their crypto journey.
On my own part, I returned to the drawing board and went back to looking for signals and trading futures, which I was already good at. Within a few months, I made back what I lost.
However, I’ve realised that projects that don’t focus on a particular roadmap but promise a lot of returns usually end up being scams. You can’t miss them if you do your due diligence.
You may like: Smart questions to ask before investing in any crypto project.
