A trail of orchestrated crypto rip deals taking place from Amsterdam to Rome is being investigated by German authorities. A number of them share the same pattern, which suggests that a gang or syndicate may be pulling the strings.
The Long Crypto Con
Crypto scams are becoming increasingly common, and rip deals are one of the most prevalent types of scams in the cryptocurrency world alongside pump-and-dump schemes. Similar to other forms of rip deals involving foreign exchanges and stocks, con artists usually trick victims into putting their money in fake investments, and then ride off into the sunset with it.
In this case, it’s cryptocurrencies or ICOs with promises of high returns on investment. Unfortunately, the victims are left with nothing but lost money, and the scammers disappear without a trace.
In November last year, Gerald Goldnagl and Valentin Szaga-Doktor, operators of rip deal units in Vienna, were caught during a sting operation in Rome and were consequently extradited to Austria for trial. They were sentenced to four years each following a lengthy confession that detailed their crimes.
Authorities have assured that there are no reported cases of crypto rip deals yet in Germany. However, the fact that many instances of these have surfaced near the country’s borders is alarming.
The term “rip deal” is as it implies: you get ripped off from a transaction. These deals are considered to be the long crypto con because they involve a prolonged and elaborate scheme to deceive investors into investing in a fake cryptocurrency or ICO. The scammers behind rip deals often spend months or even years building up the appearance of legitimacy for their fake project by holding private meetings or even conventions to establish their rapport with potential victims. At times, they may even establish more intimate or personal relationships with their victims.
The scammers may create a fake website or whitepaper, and use social media platforms, email marketing, and other forms of advertising to attract potential investors. They may also create fake social media profiles or use stolen identities to make themselves appear more legitimate.
Once they have gained the trust of their victims, the scammers may convince them to do a “trial transaction” involving a minimal amount, which more often than not goes smoothly. From there, the target is enticed to put in larger sums of money that come with promises of relatively higher returns. When the unsuspecting victim finally takes the larger bait, the promised returns are never realized, and they are left with nothing but lost money.
Another method includes the perpetrator offering a crypto wallet where the victim can keep his/her crypto holdings. By way of an exploit or due to the perp having separate keys to the wallet, the funds will be funneled out of it and the scammer will run off with it.
The prolonged and elaborate nature of rip deals makes them difficult to detect and prevent. The scammers behind these schemes are often skilled at manipulating their victims and may use a variety of tactics to evade detection.
Prevention
The victims of rip deals are often inexperienced investors who are not familiar with the cryptocurrency market or ICOs. They may be lured in by the promise of quick returns and may not have done their research on the legitimacy of the investment. These scams can be devastating, as victims may lose their life savings or be left with large amounts of debt.
To these kinds of crypto scams, it is important to do thorough research before investing in any cryptocurrency or ICO. Check the legitimacy of the project, the background of the team behind it, and the security measures in place to protect your investment.
Final Thoughts
It is important to be cautious of unsolicited investment offers and to be wary of promises of quick returns. Always do your own research and seek advice from a trusted financial advisor before investing in any cryptocurrency or ICO. Furthermore, never share your private keys or passwords with anyone, as this can put your investment at risk.
Image credit: DealDrop
Giancarlo is an economist and researcher by profession. Prior to his addition to Blockzeit’s dynamic team, he was handling several crypto projects for both the government and private sectors as a Project Manager for a consultancy firm.
