30s Summary

Australian financial expert and “Barefoot Investor,” Scott Pape, went undercover to expose cryptocurrency fraudsters who used his identity to trick his audience. He found hundreds of fake Facebook groups promoting scams, and discovered that these groups directed victims to WhatsApp where fake investors provide bogus trading advice. The investigation revealed the anatomy of these scams which prompt victims to invest large sums of money for promised high returns before the fraudsters disappear entirely. Pape warned that these cyber criminals even encourage victims to take out loans for further investments. The exploitation of crypto investors continues to rise, with losses climbing to $2.2 billion in 2024, a 21% increase from the previous year.

Full Article

Scott Pape, also known as the “Barefoot Investor” from Australia, recently shared his experience of taking on crypto fraudsters who used his identity to trick his audience. Pape and his team discovered hundreds of fake Facebook groups that were using his image to convince people to participate in cons.

Instead of just reporting these scams to Facebook and waiting for them to be removed, Pape decided to dig in and expose exactly how these scams operated. He started by creating a fake profile and engaging with these fraudsters on Facebook, pretending to be seeking investment advice.

After interacting with a fraudulent Facebook group, Pape was asked to share his phone number and was invited to join an “exclusive” WhatsApp group known as the “DB Wealth Institute.” Smelling something fishy, Pape googled the institute’s name and came across several press releases of the supposedly “investment firm” on Yahoo Finance, Forbes, and LinkedIn.

Pape came to know through his research that such “wealth institutes,” promising crypto trading instructions on WhatsApp, have been flagged by US regulators and financial watchdogs. The fake instructors guide the group members to invest their money based on false trading signals, only to disappear with all the collected funds, rebrand, and scam new targets.

During this investigation, Pape said he was flooded with over 200 messages daily on the WhatsApp group, from users bragging about their crypto trading achievements. Pape suspected these users to be bots. Furthermore, an assistant named “Ally” advised him to perform a large trade on an alternate cryptocurrency (altcoin) based on signals from the “professor.” Pape, playing along, did it and had an 81% profit in just 10 minutes.

Soon after, the scammers began to trap him even more, pressuring him a lot about how much he could invest and even suggesting he take out a loan to join one of their high-end investment programs. However, Pape had enough and backed out. He stated from his past experience with scam victims that this is exactly how these kinds of rip-offs function.

Pape, who is a best-selling author of the book “The Barefoot Investor,” warned that scammers often try to exploit victims’ desperation by persuading them to borrow more money to recover their losses. Notably, crypto frauds, hacks, and manipulation have been escalating, with a recent report revealing that approximately $2.2 billion was lost to scams and hacks in 2024, a 21% increase from $1.8 billion in 2023.