As a renowned Australian financial educator known as the "Barefoot Investor," Scott Pape has been a trusted voice in the world of personal finance. However, his reputation was recently put to the test when he discovered that his identity had been stolen by crypto fraudsters who were scamming his followers.
The Scammers’ Tactic
According to Pape, the scammers created hundreds of fake Facebook groups imitating his likeness in order to dupe people into participating in scams. Instead of waiting for Facebook to remove these groups, which could have allowed the scams to proliferate further, Pape decided to engage with the scammers and expose their tactics.
Engaging with Scammers
Pape started by contacting the scammers on Facebook under a fake name, asking for investment advice. Shortly after, he was asked to provide his phone number and invited into an "exclusive" WhatsApp group called the "DB Wealth Institute." Pape did some quick research on this supposed investing firm and found that it had been featured in automated press releases on Yahoo Finance, Forbes, and LinkedIn.
The Scam Unfolds
Pape revealed that the scammers’ tactic was to create a fake wealth institute that promised crypto trading lessons via WhatsApp. A "professor" would provide fake trading signals to group members, who were encouraged to invest their money in cryptocurrencies. Once enough money was gathered, the group would vanish with it, rebranding and targeting new victims.
The Three-Step Scam
Pape identified three key steps that made up these scams: confidence-building, greed-inducing, and fear-mongering. After making some initial profits through the fake trading signals, Pape was approached by an assistant called "Ally" who advised him to take a 100X long trade on an altcoin using the professor’s trade signals.
Making Money, Losing More
Pape made an impressive 81% profit in just 10 minutes, but the scammers quickly moved in for the kill. Ally sent Pape hundreds of messages asking how much he had to invest and advising him to take out a loan to join one of their exclusive investing programs.
The Partner Programs
Pape revealed that the scammers would offer "partner programs" based on how much an individual was willing to invest, with prices ranging from $20,000 to $5 million. However, Pape had learned from experience that this was exactly how these kinds of scams worked, preying on desperation and convincing victims to borrow money to recover their losses.
The Bigger Losses
Pape noted a crucial fact about crypto scams: the biggest losses often occur after an individual realizes they have been scammed. The scammers exploit desperation by convincing victims to borrow more money to try to recover their losses, leading to even greater financial devastation.
A Warning from Experience
As the author of the best-selling book "The Barefoot Investor," Pape has extensive experience in helping individuals avoid scams and rebuild their finances after being victimized. His warnings about crypto scams are a stark reminder that these types of exploits can have devastating consequences for those who fall prey.
The Rise of Crypto Scams
Crypto scams, hacks, and exploits have been on the rise in 2024, with a recent report from Chainalysis revealing that $2.2 billion had been lost to scams and hacks this year – a 21% increase from 2023. As the cryptocurrency market continues to grow, it is essential for individuals to be aware of these types of risks and take proactive steps to protect themselves.
Conclusion
Scott Pape’s experience with crypto fraudsters serves as a cautionary tale about the dangers of scams and the importance of vigilance in protecting one’s finances. By exposing the tactics used by scammers, Pape aims to educate his followers and help them avoid falling victim to these types of exploits. As the cryptocurrency market continues to evolve, it is crucial for individuals to stay informed and take proactive steps to safeguard their financial well-being.
References
- The Australian: "Barefoot Investor targets crypto fraudsters"
- Chainalysis Report: "$2.2 billion lost to scams and hacks in 2024"
