Abu Dhabi Entrepreneur Falls Victim to $20,000 Crypto Scam
Abu Dhabi Entrepreneur Falls Victim to $20,000 Crypto Scam

Image: Saj Shafique (unsplash)

An entrepreneur from Abu Dhabi suffered a loss of $20,000 (Dh73,461) in a sophisticated cryptocurrency scam after confusing a scammer with a previous vendor with the same name.

Rashid Alam (name altered for privacy) was approached in March through a message on WhatsApp by an individual named Nancy using an international phone number, inquiring if he was still interested in purchasing certain products.

The prior association of Rashid with a vendor named Nancy, who supplied industrial chemicals for his old business in Ras Al Khaimah, caused him to mistakenly believe he was dealing with the same vendor. He informed her that he was no longer in the chemical industry.

The conversation naturally progressed from business to personal topics. Rashid admired Nancy’s entrepreneurial skills. She shared about her prospering textile venture that catered to numerous satisfied clients throughout the Middle East, including the UAE.

Their consistent communication soon pivoted towards the topic of cryptocurrency. Nancy discussed her uncle’s involvement in cryptocurrency trading, and how he assisted her in earning through it. The idea of managing his online trading account piqued Rashid’s interest despite his initial reservations.

Wanting to be cautious, Rashid initially invested $1,000 in a crypto trading platform suggested by Nancy. To his astonishment, his investment surged to $3,000 within a short span. He decided to withdraw his initial investment and let the profit remain on the platform.

Nancy introduced Rashid to the notion of obtaining impressive yields through the platform’s leverage feature, which necessitated a $20,000 investment. Saima (name changed), Rashid’s wife, mentioned a WhatsApp group her husband joined. This group was filled with individuals who showcased their earnings from the scheme. Some even hailed from the UAE, as indicated by their contact numbers.

Feeling reassured by the evidence and testimonials, Rashid made the $20,000 investment. But challenges arose when he aimed to extract his earnings, and he was met with a 30% tax stipulation. Doubts crept in for the couple when attempts to communicate with the so-called investors proved futile.

The Khaleej Times later confirmed that these phone numbers were either not functional or not in operation.

Previously, the Khaleej Times highlighted similar scams where individuals were lured into fraudulent crypto trading activities. These platforms were unveiled as elaborate hoaxes, built to mimic genuine trading actions, tricking investors into believing they were reaping enormous profits.

These deceptions, termed the “pig butchering scam,” leverage platforms like social media, dating apps, and messaging services. Deceivers commonly feign an initial error as a conversation starter, eventually fostering trust over time. Victims are then directed to specific platforms or apps under the swindlers’ control.

UAE’s legal bodies persistently emphasize prudence on social platforms. As per prominent research entities, cybercrime is expected to cause a global financial drain of $10.5 trillion annually. Esteemed business magnate Warren Buffet categorizes it as a paramount challenge, placing cyberattacks as a more severe menace than nuclear weaponry.

Scammer’s Strategy:

  1. Engage the target through an unexpected text or on a dating platform.
  2. Forge a bond via amiable messages over an extended period.
  3. Propose an investment opportunity in a crypto trading platform.
  4. Establish credibility by permitting minor withdrawals as presumed profits.
  5. Persuade a more substantial investment.
  6. Terminate the platform and vanish with the invested funds.