Story of the Crypto-Scammer Who Failed

security Oct 30, 2019

“All fraud stories are the same,” you can say, “just as all stories about the Cheater and the Cheated.” Sometimes it feels like good guys can never win this fight.

CoinLoan's story isn’t a bit like any you’ve ever heard. In our case, the man who lives by the sword dies by the sword. Well, that wasn't going to sound so dramatic.😄

The story happened with our Business Development Officer, Mike Rozhko. Every day, his phone receives messages from strangers. People from Hong Kong and Chicago to Lisbon and Budapest are in seeking common business ground through networking. Networking in the crypto-space, you can’t escape scam messages. For such cases, Blacklist is our middle name.

In September, Mike got one of those spam messages in Telegram from a guy called himself Max Sapelov and looked like Max Sapelov. Ironically, the message arrived at the same time when Mike has been corresponding with the true Max Sapelov, CoinLoan’s co-founder and CTO, right in the next chat.

Now, Mike’s hand was hovering on the Delete button. Although he always wanted to see what's next. By observing spammers for years, Mike felt that he knows their weaknesses and can play a little game.

When the false-Max asked him to send 5 BTC, Mike answered: “Sure!”
The game was afoot.


A Stunning Turn of Events

Excerpt from the dialog

The full conversation is too long to be published, so we’ll choose (here and after) the key messages for you.

Mike: “Send me a test payment of $10. I can’t make a transaction”False-Max: “Try sending twice if you can’t send 5 BTC once. Make it urgently, I’m in a tight corner!”
Mike: “I need to pay for the activation and then will be able to make a transaction”
False-Max: “Ok”

According to his plan, false-Max tries to get Mike to pay before he has time to think the situation through, as many scam artists usually do. Mike sticks to his own narrative and refuses to react to the provocation. He feeds false-Max misinformation, and guess what happens? Mike wins the battle and gets $10 as a prize.

It took Mike one hour to cheat scammer out of money. What does this ridiculous episode teach us?

Tip #1. How to counter “activation” disinformation?

There are numerous software crypto wallets. Best of all, software wallets are free, and you only pay when you make transactions. It means, that scammer didn’t need $10 to “activate” account.

Moreover, from screenshots that Mike sends to the chat further, we can see that he used a Bitpay wallet. This info we have allows us to make a simple fact-check about Bitpay pricing on the company's website and confirm our suspicions. It stays that the only fee they take is a 1% transaction fee.


The Same Trick Won't Work Twice, Right?

Excerpt from the dialog
False-Max: “Sent already. I thought you have seen it”
Mike: “Not yet((“
False-Max: “It has gone through. Confirm”
Mike: “I do not see((“ *adds a screenshot from the wallet*
False-Max: “Really?”
Mike: “Let me know if you can proceed with the payment of $10 soon. Otherwise, I would not be able to help. Sorry 😔”
False-Max: “Sent”

It should be explained at this point how the hunter has become the hunted. Please note how Mike “keeps the ball” in our game. The topic of 5 BTC is already forgotten. The conversation spins around suddenly emerged the duties and responsibilities of False-Max.

Mike’s counter-narrative clearly beats the story that scammer brought. False-Max loosed the initiative entirely. Mike starts the conversation, Mike sets the tone of the conversation, and Mike literally makes false-Max to do what he wants him to do: to send $10 one more time.

Tip #2. How to check the absence of a transaction?

Ignorance can be bliss sometimes, but not when it robs you of the main advantage of cryptocurrency. It is a fact that all your transactions record in the blockchain (forever!). When Mike says that the transaction failed, false-Max should have checked that instead of taking words for granted.

After sending $10 in Bitcoin from one address to another, the false-Max was supposed to get a payment ID. With this info, tracking your payment status on https://blockchain.info/ is a piece of cake.


Endless Gullibility of the One Who Plays on People’s Gullibility

Excerpt from the dialog
False-Max: “Any progress?”.
Mike: “I was trying to proceed it two times, but the transaction was canceled. I can try to send it from my personal account if you promise to compensate me 5 BTC”
False-Max: “Try sending from your personal account then. You’ll definitely be compensated”
Mike: “I need to pay for the transaction from my personal account, it’s something like $10. Please send it here”
False-Max: “What transaction do you need to do on your account?”
Mike: “To pay the commission. I’m not able to transfer $10 I got from a corporate account, there is a mistake”
False-Max: “What do you think is the cause of the mistake? Sending BTC shouldn’t require any of the things you’re talking about”
Mike: “Actually, a need😞”
False-Max: “Ok. Would you be able to send BTC after the activation?”
Mike: “I’m 99% sure”
False-Max: “I just transferred some BTC to you”


Guys talk like best friends at this stage. Beyond the key messages you can see above, they discuss non-existent work-related stuff, false-Max wishes Mike to have a safe trip to Paris, and Mike sends him a “hello from Paris” photo (btw, no picture for the real Max and the rest of the team🙃).

Well, more than three weeks have passed since the green scammer first appeared and called himself Max Sapelov. Although he already suspects that there are no “activation” fees and failed payments, false-Max sends $10 for the third and the last time. It looks like our brains don’t let miserable little facts get in the way of a good story, allowing lies hit the mind with fantastic ease.

Tip #3. What will be the cost of gullibility?

For our scammer, the cost of gullibility was $30, the money that Mike finally donated to charity. However, the crypto-history has seen far more significant losses during the last years.

In the era of multimillion-dollar cryptocurrency scams, any of us would benefit from simply being aware of how easy it is to fall for a scam. Don’t allow yourself to believe you’re scam-proof. You’re not. Understanding our vulnerability enhances the sense of skepticism.

Avoid hasty actions. Refuse to be pressured and allow yourself time to think things over clearly. Before making a decision, someone wants from you, stop and think: can this be fake?