How does this bitcoin scam work?

Background:  I reconnected with an old friend on FB and we've been chatting back and forth for a couple days.  It ended up being a spoofed account and she started talking about investing in Bitcoin and I figured it was a scam.  I played along for a little to see if I could figure it out, but I just don't get it.

She asked me to start small with like $200 in my paypal account and to send a screenshot of my paypal so she could explain what links to follow. I of course did NOT send a screenshot, but what would have been next?  How does the scam work?

Probably your investing in not real bitcoin.  Your real 200 would go to a not real bitcoin account.   The scam may just end there after you "invest" your 200.   

It's also possible that you would have "gains" on your $200 and they would somehow convince you to transfer those gains back to paypal, re-invest them as something physical and send that to them as well.  Like apparently it's unbelievable the type of things people will think Amazon Gift cards can and should be used as currency for. 

Like "Geez Curtis your $200 turned into $1000 overnight!  you really know how to pick bitcoins"   "Since you were so lucky there I have a different coin that I can get you hooked up with that returns even more but you can't invest direct from paypal".  

Then you use paypal to buy $1000 of real stuff, it's gone before paypal realizes the $1000 was fraudulent and your alternate funding source gets dinged for it because you are never getting money back from where you got the bitcoin gains.

Thats my guess anyway.

I wonder why the screenshot of my paypal though

In reply to Curtis73 (Forum Supporter) :

Maybe to see if they were wasting their time on someone that wouldn't question things?  Yes this is a common scam.  They'll "show" great returns and then offer other "investments" that you can do to make more.  Then when you want to exit your positions there will be "fees" and "taxes" that must be paid up front to get your money out.  That's where people panic and throw good money after bad because they are afraid to lose it all.

You're wise to be leery. Not same deal but my GF had a friend that got scammed out of her life savings...no joke.  The ruse was similar in that it would be 3X ROI or some such. They even sent receipts for the gain and asked for more investment, which essentially cleaned out her savings. It's a much longer story, but really tragic.

My aunt fell for something like this. A "bank" in an island country somewhere promised crazy returns, something like 10x your investment. I wish she had asked me before she went ahead.

They took her for $25k and she'll never get it back.

I think they're learning.  This one suggested I invest no more than $200 and I could make $40 per trade.  I lied and said I had $10k to invest and they said "noooo, start slowly."

Earning false trust.  Smart.

carbidetooth said:

...They even sent receipts for the gain and asked for more investment...

This reminds me a bit of the Madoff scam (which was a pyramid scheme).  He would send out statements of the trades that showed the claimed gains, and they were all real numbers....except... the statements were created by looking at previous prices / trades that would result in the gain, but no actual trades were done.

Just something to be aware of.

Curtis73 (Forum Supporter) said:

Background:  I reconnected with an old friend on FB and we've been chatting back and forth for a couple days.  It ended up being a spoofed account and she started talking about investing in Bitcoin and I figured it was a scam.  I played along for a little to see if I could figure it out, but I just don't get it.

So she wasn't really an old friend on FB but someone who hacked her account and was masquerading as your old friend with enough historical information to almost fool you? Scary.

VolvoHeretic said:

Curtis73 (Forum Supporter) said:

Background:  I reconnected with an old friend on FB and we've been chatting back and forth for a couple days.  It ended up being a spoofed account and she started talking about investing in Bitcoin and I figured it was a scam.  I played along for a little to see if I could figure it out, but I just don't get it.

So she wasn't really an old friend on FB but someone who hacked her account and was masquerading as your old friend with enough historical information to almost fool you? Scary.

Yes and no.  It was a high school locker neighbor/friend and we hadn't spoken for 35 years so there weren't any details I remembered.  If I said "how's the family," and she said "JimBob died last year," I wouldn't have known if she was lying or not.  I had no real frame of reference to use to know this person wasn't who they said because I didn't remember anything about their lives.

In reply to Curtis73 (Forum Supporter) :

Thanks, I see.

Disclosure, I don't belong to Facebook or Twitter and never will and I don't know how any of this works, but my wife has friends on Faceplant who tell her that she has asked them to be friends with her even though she already is so it must be some kind of hack/scam going on. She then has to change her passwords and supposedly uses good strong ones but eventually it happens again. I hope her friends don't respond to the friends requests.

Had they said who they wanted you to invest through, or send your money to, yet?

The reason changing the passwords doesn't work is that it's not a hack,  it's a spoof. They just copy the info off the original real page and parrot it back to you. Just ignore them.....

VolvoHeretic said:

So she wasn't really an old friend on FB but someone who hacked her account and was masquerading as your old friend with enough historical information to almost fool you? Scary.

This is super common. These are NOT hacked accounts. They are CLONED accounts, which is much simpler and far more common.

They just copy all the public information from an account - the name, profile picture, etc. No hacking involved. Just copy and paste. No hacking or gaining any sort of control of or access to the original account.

They then send a bunch of friend requests to all the publicly viewable people who are friended to that account. Lots of people accept them because, they know that person and that is their picture. They don't stop and check that they're already friends.

Then they reach out directly and engage in a scam impersonating that person.

Yeah... super simple.  Copy, paste, join, add the same friends as the original account.  Whenever I get a friend request, I search through my friends to make sure I'm not already connected with them.

Driven5 said:

Had they said who they wanted you to invest through, or send your money to, yet?

They advised me to put $200 in paypal, send them a screenshot, then they would use the screenshot to show me where to click so that I could buy bitcoin directly through paypal.

I, of course, did not do any of that.

In reply to Curtis73 (Forum Supporter) :

Yeah, since I think you can actually do that, I'm not sure how that would actually work either. I don't see anything pop up for that on a quick internet scam search. Seems to me they'd probably be looking to misdirect you without you noticing, directing you to show them personal information without you noticing, or getting you to do it legit the first time then showing you a 'better' way to do it later?

The attack is a pig buthering attack. 

Basically they get you to invest in their market, then there are some gainz, then you are encouraged to withdraw those gainz and go get something nice.

Now you saw how easy it was and how trustworthy the person is.

So you invest more - $2k this time.

Holy smokes the gainz!  It went to $4k overnight.

But when you withdraw this time, you are told you need to pay a fee because its your second withdrawl, or its over a certain amount, or the laws changed and they have to prepay tax..or...whatever.  So you send them another $300 for taxes, figuring you are still gonna get a $1700 profit.

Only now, there is a minimum transaction of $10k.  So you need to put in another $3-4k to double  it up to $10k then you can withdraw.

And so on...and so on...and you are a butchered pig.  

In reply to 93gsxturbo :

How do they get you to invest in 'their market' for bitcoin by using paypal, when paypal has a legimiate 'crypto' button staring you in the face as soon as you log into your account, and a bitcoin button staring you in the face on the subsequent page? If you do that, they can't fake the gains.

The gainz they promise are better than the gainz you get through the paypal market.  

Common sense isnt that common.  

Spoofed account, likely made by what amounts to slave labor in South Asia, with a set of instructions meant to build trust and then eventually fool you into sending them bitcoin or other untraceable digital currency. 

It also will eventually involve fabricated screenshots of digital wallets to show you how much money you've made. Convincing you with withdraw cash and go to Bitcoin ATM's and send the scammers the QR code so it's instantly transferred. 

I hate the industry has adopted the "pig butchering" term but like good BBQ, you have to do it slow and low to get the best results. I have several cases I've worked in the $250k+ losses with FBI, SS, DEA, IRS agents all working the cases. Mostly futile to try and get the money back unfortunately.  Prevention is the only thing that works with education efforts but people just don't listen a lot of time. 

mtn said:

Spoofed account, likely made by what amounts to slave labor in South Asia, with a set of instructions meant to build trust and then eventually fool you into sending them bitcoin or other untraceable digital currency. 

That tracks, because my friend that was spoofed was Thai