Most crypto scams rely on mass communication, spreading to a large audience of potential buyers. However, some are dependent contacting persons directly, relying on personal confidence to extract funds.
This is the case of the offer of “personal portfolio management” by a self-styled Trading Pundit, under fake names with fly-by-night Facebook business pages. Facebook users have been contacted by these profiles, with the chief promise of 80-90% guaranteed returns, and a demand for 20% commission on investments.
As more potential investors have heard of the wild returns of crypto, such personalized scams are becoming more influential. Many people have a fear of missing out, but also don't trust their instincts. Instead of doing the research themselves, or investing in the most stable cryptocurrency right now (Bitcoin), they instead throw large sums of money at so-called crypto portfolio managers to get them to the moon.
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The Origins of the Trading Pundit
It is unknown how the idea of trading punditry appeared. Because cryptocurrencies are coming into the mainstream, even now, clear and reliable information on trading and investing is scarce. No doubt
Trading Pundit, therefore, seems to be a regular Facebook-based scam, operating internationally, but this time with a bent on crypto investing.
How Trading Pundit Works
The style of trading pundit is to contact people personally. He offers to take out the complexity of crypto investing, and guarantees results- something like $60,000 within days. The messages are also personal and contain “testimonials” from “satisfied customers”.
These trading pundit facebook accounts account send out the occasional status update, with general financial or trading advice, and a few references to exchanges, Bitcoin and other crypto-related topics. In general, the Facebook profile looks solid, enticing, but not over-the-top. There's enough activity to fool the novice cryptocurrency enthusiast, and enough positive memes and status updates to make it appear as if everyone's getting rich in crypto.
Why Trading Pundits Are a Scam
No one can guarantee results in the crypto markets. While coins appreciate by more than 100% overnight, the market is volatile, profits are uncertain, and there are no accredited investors. To invest other people's money in crypto, a special funding vehicle usually needs to be created with a permission from authorities.
Scammer trading pundits contact people privately with the intent of acquiring their money behind the scenes. An attempt to broadcast these requests for money would be met with swift criticism from knowledgable investors. For those of us in the space that follow the news and invest our own money, we know what a scam looks like, and have no issues calling one out when we see it. But when these things happen in private messages, there's little that can be done other than to warn people broadly, as I'm doing in this post.
Last but not least, the lack of a traceable identity and a verifiable social network identity raise a red flag to watch out for. If you can't find any record of this person other than a shoddy, short-lived social media profile, they might just be a scammer that will disappear once they lock down your financial information.
Real Stories Of Getting Scammed By Crypto Pundits
According to one “burnt” user, he was contacted by people through Facebook profiles, asking for funds with a promise for efficient investing. After absconding with the money, the Facebook connections were blocked and users are left out in the cold.
The biggest mistake of users was not to do their due diligence, or check the phone numbers and contacts for veracity.
Another trick they pull, which is much like the binary options scams. Once a client tries to cash out their “earnings” they are blocked from social media, never hearing from the crypto manager again.
One user complained:
“It is unfortunate that I was scammed by these individuals on behalf of pundit trading, these individuals provided me with fake contracts, and could I have guessed they would be gone and disappeared? No, but here I am. Lost over $70,000 and in tears! ”
Then, there was a similar case of deep losses:
“… (he) is also viral on Facebook asking people around the world to invest in bitcoin, promising them 20% profits. What you won’t know until later! This individual along with his peers have hidden their identity and will provide you with fake FCA (in London) contracts and trade your money illegally. The contact details and website is all fake (call the number and find their address) the bitter truth is I have lost over $60,000 and counting.”
Why Best Avoid ANY Trading Pundit's Advice
Investing in cryptocurrencies may seem complex and difficult. But it is best to do one's homework and attempt an outright purchase, instead of handing over funds to an unknown person. There are no laws protecting this kind of investment. Besides, the idea behind cryptocurrency is to be a sovereign owner of one's wealth, and be your own bank.
Handing over cash may be bad, but handing over crypto coins is even worse: there is no proof the coins are yours, and that you were scammed. There is no mechanism for refunds, or any hotline for help. Sending over crypto coins is final and non-refundable.
A much better approach to cryptocurrency is to do your own research and pick the preferred coins for trading or holding. Right now, a coin can yields high returns one day, and crash the next day. There are no time-tested criteria for a coin's performance. So it is best not to trust professional investors, even if their promises are high- in the world of crypto, sometimes blind luck and a bit of waiting can achieve higher returns, or at least mitigate risk.