Crypto scams are on the rise. How I avoided a trap by starting a conversation with a scammer

Cryptocurrency scams cost Australians $194 million last year. But there are tools you can use to unmask a scammer. Here’s what happened when I followed up on an offer that was too good to be true.

The Feed reporter Ilias Bakalla had a conversation with a scammer on Instagram.

Recently The Feed’s Instagram account has been inundated with comments from people claiming to offer free money or thanking other people for helping them gain financial independence.

They all looked and sounded too good to be true but they got me curious as to how they work.

One particular account always had the same offer; “I’m Paying $8,000 to the first (10) people to message me “FAITH” God bless y’all, stay blessed.”

So I messaged “FAITH” and initially, he asked where I lived and if I had a myGov account linked to my ATO (Australian Tax Office) bank account. 

Scammers can use your myGov account for a few reasons. Once they have a login they can take photos of your account and use it to create fake ATO alerts.

They then send those alerts to other people claiming they owe taxes.

Some screenshots of my interaction with the scammer.

They can also sell your details on the black market. Usually, they have a few scams up their sleeve that they will pivot to depending on how you respond.

I told him I was from Australia and asked where he was.

He told me he was in New York and that he would pay me to use my bank account. He would transfer money from a legitimate online foreign exchange account to me. I would keep some, which I would use to buy bitcoin, and send him back the rest of the money.

To back up his claims, he sent me a bunch of photos of supposed trades he had made recently to give me an idea of how much money I could expect.

A collage of the images the scammer sent me as proof of his work.

He explained his methods. “These are the ones I made days again [ago] and it was all successful,” he said.

“Reasons why I use people’s account to deposit my commissions is because…my money is currently in cryptocurrency which is fluctuating - if I leave my profits there for too long I’d lose a lot of funds".

“Which is why I am looking for a serious minded person’s account and at the end I’d pay them 30%.”

I decided to dig a bit further. There are a couple of easy ways to do a search on someone who you suspect is not being truthful with you online.

Reverse google image searching

You can take a screenshot of a person’s photo on Instagram and run it through a reverse Google image search.

I had to do it a few times because the search results focused on his clothes rather than his face.

Eventually, I was successful and was able to link back his account, and all of the photos that appeared on his profile, to a US entrepreneur with a different name.

This is the identity that was stolen by the scammer.

I decided to check out where the scammer’s profile was based.

Locating where an Instagram account is based

It’s easy to see where an Instagram account was set up - on a person’s profile you click the black text where their Instagram handle is.

How to find out the location of an Instagram account.

I did that and it showed he was based in Nigeria and not New York, as he claimed.

Dr Asish Nanda is a cybersecurity researcher from Deakin University and told me this is a very common scam.

It works as follows: Scammers will ask you to buy crypto. Once you’ve done that they’ll ask you to transfer the purchased cryptocurrency into a wallet they have “created for you”.

Dr Ashish Nanda has been studying online scams for several years.

“But in reality, they’ve given you the address of one of their wallets, which you have no control over,” he said

“Then they continue to add money to it to give the illusion that you are making profits. This is the hook to get you to add more money.”

He said Australians are good targets for scammers because they are generally more trusting and have a lot of savings.

“Most Australians by age 30 have $40-50,000 in their super and that increases significantly by the time they can access it.”

Crypto scams costing Australians

With one in four Australians owning some sort of cryptocurrency, the opportunities for scammers can be lucrative.

Last year the ACCC's Scamwatch reported Australians lost more than $350 million to investment scams. Just over half of those were investment scams involving cryptocurrencies.

Scammers use cryptocurrencies because they are encrypted, making it harder for them to be tracked.

After I stopped responding to the scammer he became persistent, sending messages every few hours to see if I was still interested.

"Are you gonna do this bro? How the f**k are you not seeing my messages?"

"Bro get the f**k up. F**k you bro. F**k you more. You show no respect."

So I gave him made-up user names and passwords to see what would happen.

“Wtf is wrong with you bro? Why (do) you keep sending the wrong information to me?"

“If you’re going to do this send (the) correct password.”

I never sent it.