Spain has hundreds of platforms dedicated to scamming through cryptocurrencies. They use luxury, cars and events to seduce young people. They are their target.
“He was caught in the street on his way home from school, he was invited to an event and when he came back from that event he was already someone else. Lucía does not know where her 16-year-old son is. Where he sleeps, or whether he eats well or badly. She is one of the victims of IM Academy, the ‘cryptosect’ accused of being an alleged pyramid scheme. His website is still fully operational. When you enter it you are confronted with a sentence. “How would you feel if you had more control over your life? Another: “Have you ever felt like you were destined for more? They promise to help you revolutionise your life, to make money. It’s the façade of a castle that hides a collective deception, one that has taken savings and families with it.
Quantifying how many ‘cryptosects’ there are in Spain is practically impossible. “It is very difficult to locate them, there are probably hundreds,” says Dan Gómez, professor at Nuclio Digital School. To try to peek into the darker side of cryptocurrencies, you have to enter the jungle of social networks.
If you are offered rewards for investing your money, you are facing a scam.
Dan Gómez, lecturer at Nuclio Digital School
On Instagram a boy in his early 20s looks at the camera with his arms crossed. Next to him a Lamborghini and behind it a stage. The car is not his. Next to him are two others, forming a triangle. “Someday I’ll have one of these,” the boy seems to think, smiling at the camera as if he knows he’s where he has to be. “When you go to one of these conferences, you get infected. You meet attractive people there, with expensive clothes and luxury cars. It’s a bit like drugs,” says Herminio Fernández, CEO of EurocoinPay. “You don’t earn Ferrari’s with cryptocurrencies. That’s image to hook these young people. They want to intimidate you,” he continues.
This is where the alarm bells ring. The image. The luxury. The promises. A fantastic world you are invited to join. But it’s not free. They ask you for an amount to invest, “in exchange they offer you a super high reward, between 15-25%. If someone offers you that, it’s a scam,” says Dan Gómez.
A few weeks ago, police dismantled another ‘cryptosect’. Kuailian lasted a long time,” says Gómez, “They were from Barcelona. They had big conventions. There was no shortage of big cars. And in their social networks, the ‘ringleaders’ posed smiling in fashionable restaurants. A few days ago the UDEF arrested them. They are accused of defrauding more than 500 million dollars.
“They sell you their product. A bot that uses an algorithm to anticipate market movements,” he says. Most of these platforms have their own currency, an asset that they artificially inflate. Their goal is to prove on paper that their asset is profitable. “They give you an account number and you make a deposit. They show you how the currency goes up. When you have 3,000 or 5,000 euros, the currency loses all its value and you don’t get anything back,” says Fernández, a cryptocurrency expert.
There are people who take out a loan to cover up the amount they have been cheated and not to tell the story at home.
Herminio Fernández, CEO of EurocoinPay
The target of this scam is young people. “They are the closest audience to this world, the sector with the highest unemployment and the people who tend to have the most free time,” says Professor Dan Gómez. But the ‘cryptosects’ also prey on older people. The procedure is different. They introduce you to a community. They introduce you to people with whom they even meet to play paddle tennis or go on a trip. They establish a bond of trust. Then they invest large amounts in the purchase of supposed bitcoins.
Fernández tells of a case. That of a father who invested all his savings to get six bitcoins. When the time came, he wanted to withdraw the money. Initially, he was asked to pay 15,000 euros in taxes corresponding to the country where the investment was located. A few days later, the six bitcoins (about 180,000 euros) were gone. “There are people who have not even told their families about this. They ask for credits to cover up the scam at home. All they want is to get back what they invested,” he says.
Herminio Fernández has been a first-hand witness to several scams. He has been involved in cryptoasset management for years. He spends part of his time alerting people to scams via social networks. “When I see a tweet or a Facebook post promising unreal returns, I report them,” he says. He adds, “I have received death threats for doing so”.
Source: eldebate.com
Disclaimer: The information set out herein should not be taken as financial advice or investment recommendations. All investments and trading involve risk and it is the responsibility of each individual to do their due diligence before making any investment decision.
