What To Do If You’ve Been Scammed
If you’ve fallen victim to a cryptocurrency scam it’s critical to take immediate action. At Crypto Consulting NZ, we specialize in scam support services tailored to your specific needs. We’ll help you confirm if you’ve been scammed, guide you through documenting your case, and provide expert advice on what to do.
Whether it’s Trading Bot Scams or Rug Pulls our consultants can assist with every step of the process to ensure you’re informed and protected.
What Are Trading Bot Scams?
Trading bot scams are a type of cryptocurrency scam that exploit the legitimate concept of trading bots to deceive and steal from New Zealanders. These scams vary from poorly designed bots that don’t function as advertised to entire platforms that disappear overnight, taking users’ money with them.
Bots are particularly appealing to beginners, as they not only trade efficiently but can also help bridge knowledge gaps for those new to the market. They use artificial intelligence to provide both automated trading and valuable insights.
However, scammers take advantage of this. Some offer low-quality bots that fail to deliver results, then disappear when users complain. Others build convincing platforms that initially seem to work well, with bots generating returns. But as soon as traders invest more money, they lose access to their accounts, and the platform vanishes in a “rug pull,” leaving investors with nothing.
How Do Trading Bot Scams Work?
Scammers set up YouTube channels and post videos promoting crypto ‘sniping bots’ or ‘MEV bots,’ claiming that these tools can exploit arbitrage opportunities in cryptocurrency markets to generate risk-free passive income. These videos often use AI-generated voiceovers and stock images, allowing scammers to quickly produce and publish multiple versions, spreading their scam widely.
The videos typically make unrealistic promises about profits, often claiming users can earn over $1,000 per day from a small cryptocurrency holding. To add credibility and entice viewers, they emphasize the supposed necessity of linking the bot to a cryptocurrency wallet containing a minimum amount of cryptocurrency. This tactic encourages victims to deposit significant sums of crypto, believing that they will make substantial returns.
Viewers are then directed to download and execute code linked in the video’s description to activate the bot. While the code appears to allow victims to withdraw their funds at any time, it secretly links to a crypto wallet controlled by the scammer. When the victim runs the code and inputs their wallet details, the contents of the wallet are transferred to the scammer’s wallet.
These fraudulent videos have been reported in New Zealand, targeting local investors. Due to the nature of cryptocurrencies, recovering lost assets after a scam is almost impossible, making it crucial for investors to be extremely cautious when dealing with wallet details or encryption keys.
Three Examples of Trading Bot Scams
Unfortunately, the world of forex and cryptocurrency is rife with trading bots that have turned out to be scams. Here are a few notorious examples:
iEarn Bot: iEarn Bot is widely believed to be a cryptocurrency trading scam. Despite claims of “guaranteed continuous income” through high-frequency trading robots, a 2023 BBC investigation revealed that thousands of investors might have been deceived. The company’s supposed founder and strategic partners have no connection to it, and users report being unable to withdraw their funds, even after paying a 30% fee for withdrawal.
Bitconnect: Bitconnect launched in 2016, offering investors high daily interest through a trading bot. Users traded Bitcoin for Bitconnect Coin, with the promise of incredible returns. However, in 2017, UK regulators challenged its legitimacy, and a cease and desist order from the Texas State Securities Board followed in early 2018. Just weeks later, Bitconnect shut down, revealing itself as a Ponzi scheme.
Mirror Trading International: This South African company promised investors daily Bitcoin growth through automated forex trading bots. By 2020, it had swindled $589 million from more than 471,000 deposits. When investors began experiencing withdrawal issues, authorities moved in, but the company’s CEO, Johann Steynberg, disappeared with the funds. He was eventually caught and jailed in Brazil in December 2021.
Signs a Crypto Bot Is a Scam
Identifying a scam crypto bot can be relatively straightforward if you know the warning signs. Poor grammar, lack of reviews, and vague details about the technology are all red flags. Here are some key indicators:
Poor Grammar and Website Issues: Like many scams, such as phishing attacks, poorly written content and formatting errors are a telltale sign. For example, scam platforms like iEarn Bot feature sloppy grammar and unresponsive web designs, signaling a lack of professionalism.
Lack of Online Reviews: Trusted platforms accumulate reviews over time. If you can’t find many reviews or user feedback on Google or reputable forums, that’s a major warning sign. Reliable trading bots have plenty of user experiences to share online.
Promises of Guaranteed Returns: No legitimate trading platform can guarantee profits. If a platform promises high or “guaranteed” returns, it’s almost certainly a scam. Trading always comes with risks, and anyone suggesting otherwise should be avoided.
What to Do If You’ve Been Scammed by a Trading Bot Scam
If you’ve fallen victim to a Trading Bot Scam, it’s crucial to act quickly. While the decentralized nature of cryptocurrency makes recovering funds difficult, there are steps you can take to mitigate the damage.
Crypto Consulting NZ offers scam support services to guide you through the recovery process. Here’s what you should do:
- Document Everything: Save all correspondence, screenshots of transactions, and any relevant details about the scam. This information will be critical.
- Alert Your Bank: If you’ve shared bank details, contact your bank immediately to flag any suspicious activity or halt future transactions.
- Use Crypto Consulting NZ’s Scam Support Services: Crypto Consulting NZ specializes in helping victims of crypto scams by offering expert advice, guidance on documenting your case, and support through the process
- Secure Your Devices and Accounts: If your personal data or login credentials have been compromised, reset all passwords, enable two-factor authentication (2FA), and scan your devices for malware.
