Fake Scam Teaches Investors A Lesson
Conning bitcoin investors out of $100,000 is no easy feat––unless you’re a crypto influencer. That is exactly what @FatManTerra on Twitter has done, with the exception that he intended to show how easily investors are being duped by bitcoin scams. The TerraLUNA advocate-turned-detractor has laid into the disgraced cryptocurrency and its founder, Do Kwon, after its $40 billion loss in May. Now he’s turning a spotlight onto numerous gullible investors.
Bitcoin investment scams
Scams always exist anywhere there is money to be made. From phishing to romance scams to rug-pulls, bitcoin and the wider cryptocurrency market is no exception. There have been countless bitcoin investment scams over the years.
In 2022 alone hacks and scams have run rampant. From Bill Murray's NFT hack to the $600M stolen from Axie Infinity to the BBC nearly airing a documentary lauding a crypto scammer, it is clear that investors are being duped right and left.
In response to this racketeering, the former supporter of TerraLUNA, FatManTerra, set out to teach gullible investors a hard lesson by cultivating a fake Ponzi scheme.
Ponzi scheme
Using his Twitter page, FatMan cryptically promoted a yield farming opportunity and invited his 100,000 followers to “DM for more details if interested.”
While some protested the investment as a scam, others extolled the venture. FatMan raised over $100,000 in BTC from the tweet and a Discord post––in just two hours!
FatMan says he has refunded the investors and calls his ‘scheme’ an ‘awareness campaign,’ inspired by the enigmatic Lady of Crypto herself, Ruja Ignatova. The infamous founder of OneCoin, a ponzi scheme that robbed millions from investors, Ignatova is now a fugitive on the FBI’s top ten most wanted list.
FatMan’s point is not to point fingers at gullible investors but rather to spotlight the influencers who are scamming people. Nevertheless, investors need to take precautions and be aware of scams.
Investors beware
Bitcoin scams and other cons beckon calls for regulation by many. However, regulations can only go so far; they cannot control or eradicate bad actors. Investors must be their own best advocates. Savvy investors protect themselves by considering some common factors when they look into a new venture.
5 ways to protect yourself from a cryptocurrency scam:
DYOR (Do Your Own Research).
Be alert to inconsistencies, bad math, or founders who come off as shady.
Understand tokenomics.
Investors must understand the business models used in web3 projects.
Use a hard wallet
Though hard wallets can still be hacked, they are far less likely to be than the plethora of soft wallets on public exchanges.
Promises and guarantees are always red flags
There is nothing certain in the crypto markets; therefore, no one can ever guarantee a return no matter what they may claim.
Lack of disclosure
Red flags should be raised if founders are unwilling to reveal their identity (dox) to a reasonable degree or if they do not publish a cogent whitepaper.
In FatManTerra’s spurious investment, those who allowed themselves to be bamboozled broke all of these mainstream investment orthodoxies and more. These investors should be very grateful that they weren’t had by an actual con artist. Hopefully, they will reconsider their decision-making process next time.
At the end of the day, each investor is responsible for their own portfolio of assets and their understanding of how a profit is made. As FatMan tweeted, “if you don’t understand where the yield is coming from, you are the yield.”
