The scammer's approach looks like this:
They get the person's details via a semi-legit-looking investment content piece, often via a social media post or reel.
The person then enters the scammers' funnel, which mirrors legitimate sales/promotional funnels with additional collateral being provided, such as webinars, emails, and PDFs.
The scammers encourage a small investment (of personal money) into their platform.
Because the scammers can't receive funds via legitimate channels, they make the targets set up cryptocurrency accounts (e.g. a legit local exchange) and also a larger global exchange like Binance, then have them send stablecoins like USDC to them (via Binance, so there is no direct link from the Australian individual to the scammers).
The scammers use legit tools like Metatrader 5 to show the target the amazing trades they're doing for them and the profits generated.
The scammers even let the investors pull their money out in an effort to build confidence.
Once the scammers feel they have built up a good relationship with their targets (which can happen over many months), they will do a few things:
Encourage them to send more money.
Encourage them to tell their friends, family, and workmates about the service.
Coach them on setting up an SMSF so they can also invest their super with the scammers.
The scammers will send the customers to legitimate SMSF businesses that offer online setup services and tell the person they have a 'partnership' or 'referral' relationship with the SMSF provider (again, this is an effort to make them look legitimate).
The scammers will coach them on how to complete the forms, etc, and we've even come across a few cases where the scammers have released money (from their own stolen funds) to the person to cover any upfront setup fees.
Then the scammers use the same approach to get AUD transferred to an exchange and then to themselves via Binance and others.
When the scammers have milked the individuals enough, they will cut off all contact and remove the person's access to the fake platform. Some people we've spoken to have been strung along for months.
There is also the possibility of secondary scams involving identity theft.
The red flags
So many red flags, including:
The businesses are based overseas, and often state they're based in places like Cyprus for tax or regulatory reasons.
They are not licensed to provide advice in Australia (or the UK or anywhere).
The only way to send funds is via cryptocurrency payments.
They groom and manipulate people over a long period.
Large numbers of fake 5-star reviews on platforms like TrustPilot.
There are active warnings about these operations on multiple government websites, like ASIC MoneySmart and the UK Financial Conduct Authority.
They promise unrealistic, high returns with little risk.
Who they target
People with lower than average financial literacy.
Men, of any age, but often aged in their 50s.
Men who work in blue-collar industries and trades often have limited exposure to investments or finance in their day-to-day lives.
Typically, people from English-speaking backgrounds (Australians, Kiwis and some Europeans) are targets, and the scammers are less likely to dupe people with Asian or South American heritage.
Individuals who don't do any independent research.
Who are the scammers?
The following are some of the organisations we've seen, with links to the relevant warning sites:
The above list is not exclusive. There are hundreds of similar scam operators out there.
Search via Moneysmart - Investor Alert List, and also complete a Google search of any business.
And simply don't send your crypto to any third party to invest.