\n
Placeholder while article actions load<\/title><\/div>\n<div class=\"teaser-content grid-center\">\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">The recent <a target=\"_blank\" href=\"https:\/\/www.washingtonpost.com\/business\/2022\/05\/12\/crypto-crash-terra-national-bitcoin\/?itid=lk_inline_manual_2\" rel=\"noopener\">cryptocurrency crash<\/a> won\u2019t deter investors looking to get rich fast in a new technology they barely understand. It also won\u2019t stop the many crypto-scammers who understand the psychology behind the bitcoin bubble, the mind-set that leads investors to willfully ignore the blood-red flags that warn they are being conned.<\/p>\n<\/div>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">The criminal activity surrounding cryptocurrency is a growing concern to law enforcement. The FBI has formed a <a target=\"_blank\" href=\"https:\/\/www.justice.gov\/opa\/speech\/deputy-attorney-general-lisa-o-monaco-delivers-remarks-annual-munich-cyber-security\" rel=\"noopener\">new specialized team<\/a> \u2014 the Virtual Asset Exploitation Unit \u2014 dedicated to cryptocurrency crimes. The Securities and Exchange Commission <a target=\"_blank\" href=\"https:\/\/www.washingtonpost.com\/business\/2022\/05\/03\/sec-crypto-enforcement-expansion\/?itid=lk_inline_manual_4\" rel=\"noopener\">announced <\/a>it\u2019s nearly doubling the number of staffers in its unit responsible for protecting investors in crypto markets.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p><span class=\"font--article-body font-copy hide-for-print ma-0 pb-md db italic interstitial\"><a target=\"_blank\" data-qa=\"interstitial-link\" href=\"https:\/\/www.washingtonpost.com\/business\/how-to-avoid-rug-pulls-the-latest-cryptocurrency-scam\/2022\/05\/11\/7600db20-d141-11ec-886b-df76183d233f_story.html?itid=lk_interstitial_manual_5\" rel=\"noopener\">How to avoid \u2018rug pulls,\u2019 the latest cryptocurrency scam<\/a><\/span><\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">Investors by the thousands are being duped into investing in <a target=\"_blank\" href=\"https:\/\/www.washingtonpost.com\/business\/2021\/05\/18\/ftc-cryptocurrency-scams\/?itid=lk_inline_manual_6\" rel=\"noopener\">cryptocurrency-related fraud schemes<\/a>. The scams range from bogus cryptocurrencies to people who have lost money believing they would profit from <a target=\"_blank\" href=\"https:\/\/www.justice.gov\/usao-sdny\/pr\/man-charged-defrauding-customers-who-sought-buy-cryptocurrency-mining-computers-and\" rel=\"noopener\">crypto mining ventures<\/a>.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">\u201cNew financial frontiers can also generate fresh opportunities for old-fashioned fraud,\u201d said Damian Williams, U. S. Attorney for the Southern District of New York, after announcing charges against a New York man accused of misrepresenting to investors that he had purchased specialized cryptocurrency-mining computers.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">I\u2019m a student of scams. I\u2019ve written about them in my column and uncovered one <a target=\"_blank\" href=\"https:\/\/www.washingtonpost.com\/wp-dyn\/content\/article\/2007\/09\/08\/AR2007090800159.html?itid=lk_inline_manual_10\" rel=\"noopener\">illegal scheme<\/a> that led state authorities to shut it down.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">I frequently read criminal complaints looking for the answer to what we natural-born skeptics wonder: How do con artists get people to believe their scams?<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">Even after I\u2019ve exposed a fraud, victims blamed me for outing the con.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">It\u2019s not enough to say to potential victims, \u201cIf it\u2019s too good to be true, it probably is.\u201d<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">Victims clearly find<b> <\/b>the scams believable. So then: What\u2019s the recipe for the trickery?<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">To find that answer, it helps to dissect the deceit.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">Let\u2019s look at the case involving another New Yorker, Eddy Alexandre, who was arrested and accused this month of running a cryptocurrency and foreign exchange trading Ponzi-like scheme that collected $59 million from investors.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p><span class=\"font--article-body font-copy hide-for-print ma-0 pb-md db italic interstitial\"><a target=\"_blank\" data-qa=\"interstitial-link\" href=\"https:\/\/www.washingtonpost.com\/business\/2022\/05\/12\/crypto-crash-terra-national-bitcoin\/?itid=lk_interstitial_manual_19\" rel=\"noopener\">Crypto\u2019s plummet tests the durability of a hype-driven industry<\/a><\/span><\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">A Justice Department <a target=\"_blank\" href=\"https:\/\/www.justice.gov\/usao-sdny\/press-release\/file\/1505421\/download\" rel=\"noopener\">complaint<\/a> alleges Alexandre\u2019s platform, EminiFX, invested relatively little money from the victims in crypto or foreign exchange trading. Instead the money collected from investors was used to fund his lavish lifestyle, including the purchase of a $155,000 BMW.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">Alexandre primarily traded individual stocks, investing about $9 million of people\u2019s funds and losing more than $6.2 million, according to the Commodity Futures Trading Commission (CFTC), which filed a civil enforcement action against Alexandre and EminiFX.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">Alexandre is also charged with commodities and wire fraud. He has entered a plea of not guilty, according to the Justice Department.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">The attorney representing Alexandre did not respond to requests for comment.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">The accusations against Alexandre, like so many other similar cases, can be instructive in what not to do. So here are six signs of a classic Ponzi scheme.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\"><b>Sign No. 1: Promise returns that seem plausible.<\/b> Many people no doubt may recall that <a target=\"_blank\" href=\"https:\/\/www.washingtonpost.com\/local\/obituaries\/bernie-madoff-dead\/2021\/04\/14\/f8e33fa8-c5da-11df-94e1-c5afa35a9e59_story.html?itid=lk_inline_manual_27\" rel=\"noopener\">Bernie Madoff<\/a>, the mastermind of one of the largest Wall Street Ponzi schemes, consistently paid out an annual return of about 12 percent, which seemed reasonable at that time.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">That should have tipped folks off. Market returns are unpredictable.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">In the complaint about EminiFX, the CFTC said the company promised potential participants that they would receive guaranteed returns of at least 5 percent \u201cevery single week.\u201d<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">A photo, obtained by the FBI, showed a whiteboard in the EminiFX office that had the following wording: \u201cNever less than 5%[,] never more than 9.98%!!!\u201d<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">\u201cThis statement appears to indicate that the \u2018weekly profit\u2019 was not based on actual investment returns but was fictitious,\u201d according to the FBI. \u201cReturns could not be predicted to fall within a narrow range.\u201d<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">If you are presented with a moneymaking opportunity promising easy earnings or extraordinarily consistent investment returns, I can assure you it\u2019s very likely a scam.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p><span class=\"font--article-body font-copy hide-for-print ma-0 pb-md db italic interstitial\"><a target=\"_blank\" data-qa=\"interstitial-link\" href=\"https:\/\/www.washingtonpost.com\/technology\/2022\/04\/04\/crypto-scams-coinbase-liquidity-mining\/?itid=lk_interstitial_manual_35\" rel=\"noopener\">An ex-cop fell for Alice. Then he fell for her $66 million crypto scam.<\/a><\/span><\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\"><b>Sign No. 2: Promoters\u2019 ostentatious<\/b> <b>wealth display. <\/b>Con artists want you to want what they have. They need to look like they have money. They wear expensive clothes or drive luxury vehicles. They host parties and hold regular conference calls bragging about their wealth.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">Want to know what a millionaire looks like? Read \u201cThe Millionaire Next Door.\u201d<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">Ordinary millionaires don\u2019t have a need to prove their net worth, but scammers do.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\"><b>Sign No. 3: Proprietary secrets prevent full disclosure. <\/b> Madoff was very secretive about how he achieved returns for his investors.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">On its website, EminiFX says investors earned relatively high returns through automated investments in cryptocurrency and foreign exchange trading. But when asked to explain the technology behind the business model, the FBI alleges Alexandre told investors it was a \u201ctrade secret.\u201d<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">When it comes to investing full \u2014 verifiable \u2014 disclosure is your safety net.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\"><b>Sign No. 4: Recruiting is key. <\/b>A successful Ponzi scheme needs new money.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">Who better to build trust for their scheme than the people investors know personally?<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\"><b>Sign No. 5: Participants brag about their payouts.<\/b> What keeps a Ponzi scheme going is people bragging about how much money they\u2019ve made.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">I found several videos on YouTube of individuals sharing how they made money from EminiFX.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">One thing stood out. They didn\u2019t talk about how the money was made. They just boasted about their returns.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\"><b>Sign No. 6: Cashing out becomes difficult. <\/b>At some point, the Ponzi scheme collapses or law enforcement shuts it down.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">To protect what may be left of investors\u2019 money, EminiFX has been placed in receivership.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">So far about 1,000 investors have reached out to Raines Feldman, the law firm handling the receivership, according to David A. Castleman, who has been appointed temporary receiver for EminiFX.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">Castleman said investors should not continue to use the EminiFX online platform but instead send an email to <a target=\"_blank\" href=\"https:\/\/www.washingtonpost.com\/business\/2022\/05\/18\/fbi-eminifx-crypto-pyramid-scam\/mailto:EMiniFX.Receiver@raineslaw.com\" rel=\"noopener\">EMiniFX.Receiver@raineslaw.com<\/a> and include the name on their account, an email address, a mobile number, and the amount they invested.<\/p>\n<\/div>\n<div class=\"article-body\" data-qa=\"article-body\">\n<p data-qa=\"drop-cap-letter\" data-el=\"text\" class=\"font-copy font--article-body gray-darkest ma-0 pb-md\">But some investors will be hard to convince. \u201cThe minute we start accumulating wealth and raising our voices, that\u2019s when the adversaries tackle us down,\u201d one YouTube user wrote in the comment section of a <a target=\"_blank\" href=\"https:\/\/www.youtube.com\/watch?v=jR8vYX9pkFg\" rel=\"noopener\">video<\/a> about the shutdown of EminiFX.<\/p>\n<\/div>\n<section class=\"b bt bc-offblack dn-ns hide-for-print\" \/><\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.washingtonpost.com\/business\/2022\/05\/18\/fbi-eminifx-crypto-pyramid-scam\/\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Placeholder while article actions load The recent cryptocurrency crash won\u2019t deter investors looking to get rich fast in a new technology they barely understand. It also won\u2019t stop the many crypto-scammers who understand the psychology behind the bitcoin bubble, the mind-set that leads investors to willfully ignore the blood-red flags that warn they are being […]<\/p>\n","protected":false},"author":1,"featured_media":17154,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[36],"tags":[8232,52,8231,7077,3630,556],"class_list":["post-17153","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-alleges","tag-cryptocurrency","tag-eminifx","tag-fbi","tag-pyramid","tag-scheme"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"http:\/\/egrowonline.com\/wp-content\/uploads\/2022\/05\/OX5OCMGSVAI6ZCDL353BQPJDH4.jpgw1440.webp","_links":{"self":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/17153","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17153"}],"version-history":[{"count":1,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/17153\/revisions"}],"predecessor-version":[{"id":17155,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/17153\/revisions\/17155"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/media\/17154"}],"wp:attachment":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17153"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17153"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17153"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}