When it comes to investing money into cryptocurrencies, how can you tell who’s real and whos not?

As a best-selling author on financial engineering and somewhat of a public figure I regularly get private messages from people via Facebook through the community pages that I moderate or actively participate in, or simply provide interesting content to occasionally. In many cases I get ‘friend requests’ and although I do not advise anyone to wholesale confirm friend requests from strangers, before I have time to look closely at their profile I (too often) do so – a bad habit I need to change – but thankfully, it’s not difficult to block charlatans or scammers once they’re identified.

In most cases, people who reach out to me are real, not scammers of any kind and genuinely want to learn more about what I do and/or how I do it. And I’m always happy to oblige.

However, every once in a while, a n’er-do-well will reach out to me with nefarious intent. They never get very far, even if they’re professional scam artists, for several reasons that I’ll explain right now so that you can do the same due diligence on anyone that contacts you for any reason via Facebook.

Before you accept any Facebook friend request, it’s wise to check them out. The very first place to look is their Facebook profile.

Look at the URL of their profile.

For example: my personal profile reads like this https://www.facebook.com/John.A.Logan/

If you look at my profile, you’ll see my Facebook name is John Logan, but the URL gives the name I am registered under, which, in my case includes my middle initial. Pretty obvious that I am who I say I am, at least from a naming perspective.

However, if the URL reads differently than the supposed person’s profile name, i.e. the profile picture shows a clearly Caucasian woman named Mary Jones, but the URL reads something like https://www.facebook.com/Okemba.Mbuto/ ? Chances are pretty good that you’re not going to be talking to Mary. In fact, you may not be talking to a woman at all.

That’s an easy way to identify a seriously incompetent crook. Blocked.

But what if they’re smart enough to register under a fake name or clone someone else’s Facebook page?

The next place to look is their friends list.

One friend? And it’s you? Buh bye!

But let’s say they have lots of friends. Who are they? What do they look like? How do they match up with other identifiers that the page says about this person.

For example, if Mary Jones’ About page says she is from and currently lives in Helsinki, Finland but all her friends are Oriental men, that might be a question mark. Maybe she does OnlyFans and they all happen to be Oriental? Maybe. I don’t judge.

Look at ‘her’ posts next.

Only of her and only half a dozen? Regardless of where they appear to be, they may not be her at all. And if there’s more, scroll down a ways. If you see someone making a comment in a different language, and especially if you see ‘her’ responding in the what appears to be the same language, go directly to Google Translate and find out what language it is. If it turns out to be some obscure dialect from Nigeria or India or Kazakhstan, chances are pretty good that you’re not really going to be talking with ‘Mary Jones’ from Helsinki.

But let’s just say everything else checks out. And you start to have an online text conversation with this person. What I’ve found is that most people who contact you that want (more) information about something that you posted, or in some way think you can educate them or help them in some way solve a problem they have, they’ll lead off with that when they first contact you.

Maybe something like:

“Hi John, I read that post about (this and that) that you put up on (wherever) and I have some questions about that. I hope I’m not bugging you, but can you help me?”

In contrast, I’ve found that 90% of wannabe scammers (probably a higher percentage if I really looked back) will lead off with:

“Hi friend. How are you?”

That simple greeting, in my experience, is a red flag. What they’re looking for are trusting folks that have no experience with scammers. A pleasant greeting is followed up by some small talk, maybe about the subject matter of the community page that pointed them to you or maybe something they found on your profile. Generic stuff. Never a specific.

Then comes the usual giveaway for me:

“Where are you from?” (or where do you live?)

Duh.

If, whoever this person is, did the slightest research on me – meaning just looking at my Facebook profile information or any of the many posts I write about where I live or where I’m from, they’d have that information already. For some strange reason, scammers aren’t smart enough (or just too lazy) to do that in most cases. So, my usual answer is something akin to “enough small talk, what’s your pitch?” and sure enough, most of them get right to the point, “Have you heard about this company that (will make you rich somehow)?”

And they’ll go on to tell you they’ve invested with them for X months/years and made oodles of outrageous returns on their investments and they just wanted to be nice and share it with you!

How kind, right?

Of course not. What I’m usually pitched is something related to cryptocurrency and 100% percent of the time it’s some form of Ponzi scheme or some other ridiculous get rich scheme of another sort regarding all manner of investment types. You name it, I’ve probably been pitched something similar.

Quite frankly, some of them, I find interesting enough to toy with, pretending that they’ve found a perfect mark – gullible and greedy or just stupid and in need of money quickly – and I will waste their time while I research every bit of information I can find before I lay it all out for them and have them suddenly (often along with their Facebook page) immediately disappear.

Noting of course, the sophistication and connections of some crooks, Bernie Madoff and more recently, Sam Bankman-Fried (of FTX fame) come to mind. How do you go about determining if a person (maybe it’s someone who is pitching managing your money for them like Madoff did) or a website (not just an exchange like FTX, but maybe more like an investment strategy) is legit or not?

Do Your Own Research is not just a saying. It’s a must when your money is involved.

Let’s start with a person who wants you to invest “with” them, meaning, just like Madoff did, you hand over your money to this “expert” who is guaranteeing you uncommon (and in most cases outrageously good) returns on your investments, usually in an also ridiculously short period of time.

If the word “guarantee” ever comes out of this person’s mouth as relates to your supposed investment return…leave the conversation. Period. Unless you’re God, not even Ray Dalio can guarantee any amount of ROI. Ever. In any timeframe. Ever. With any kind of investment. Ever.

That’s an easy giveaway. People who promise X% are liars from the get-go.

But let’s say they don’t make promises. Instead, they point to their track record of success and on top of that they have several references (maybe even people you know, like in both the Madoff and FTX cases) who are important and smart and would never fall for any scam…you’d think.

Think again.

Madoff had dozens of high-profile people who were otherwise incredibly smart and no suckers in any way shape or form. But if you didn’t already know, Bernie Madoff once sat on the Board of Directors of the Securities and Exchange Commission, and they didn’t have a clue about his criminal activities despite a whistleblower repeatedly alerting them for eight (yes, 8) years. So deceit can be remarkably hidden.

And SBF had Senators, super savvy VCs and Fortune 100 CEOs socking money away in (what they thought) was FTX’s safe custody of their cryptocurrencies.

While those two are notoriously public, there are plenty that didn’t make the front page or the evening news that were just as sneaky…at least until they were caught.

So how do you avoid scams like that?

Well, again, let’s start with the person. The ‘broker’.

Are they registered with FINRA and/or the SEC? No? Walk away. Did they say they were but they’re not? Run away. They’re crooks for sure.

Who pointed you to them? Do you trust that person? Yes? If so, how did they get involved? What’s in it for them if you come in too?

Maybe the broker is, in fact, registered and hasn’t had lawsuit after lawsuit follow them around (info you can find online very easily when you look them up), but for all you know, your friend might well be honest and unknowingly be an early investor in a Ponzi scheme, meaning they’ve invested some (usually substantial) sum of money and are getting ample (and promised) returns back on that money…at least right now. Just like Madoff did for decades. The perpetrator might also be paying them a ‘bounty’ for bringing in new clients (usually in the form of a higher return as opposed to some lump sum of cash). But the usual motive operandi being that the perpetrator is also convincing them (and hopefully you) to put in more and more money (based on their ‘track record’) and they’ll never get all that back.

Will Rogers once said “I’m not so much interested in the return ON my money as I am in the return OF my money.”

You should be too.

What about that track record? Can you see all the trades they made to prove they do what they say they do?

“No. You wouldn’t understand it.” Or “That’s proprietary information.”

Yeah? Count me out?

What about when someone points you to a website?

Well, I just got done exposing one and I’ll explain exactly what I did.

First, I was approached a while ago by someone on Facebook by the name of Ruth. She appeared to be a real person (and may well be) and her profile didn’t draw any red flags, nor how she approached me initially, asking me a specific question about a post I put up on a crypto-centric webpage, and since she was new to that group, I accepted the friend request.

Crypto related small talk ensued over some days and at some point, she asked me how my crypto investments have been doing. No red flags yet. Lots of people want to know that because I have over 50 different cryptos in my portfolio and while I post a pie chart of my holdings occasionally, I don’t share my financials…ever…even when I win big. Nun ya.

Then came the red flag. “Where are you from?”

And shortly thereafter, a clue about a website that she ‘invests’ money in called “TradeXpot.com”

Not tradespot.com or tradepot.com, but tradeXpot.com.
I asked how she was connected to that company.

“I stake my coins there”.

“They offer better ROI and better promos and the online support is top notch and active 24/7”

“The profits are stable and comes daily.”

So, I took a look at what they offer.

Source: https://www.tradexpot.com/pricing.php

Holy Moses! If I invest a million dollars, in 4 months I’ll have two million!

That means in one year I’ll have two million MORE than I invested in the first place! What a deal!

Man, I can’t wait to read some of the thousands of reviews.

Wait…there’s a testimonial near the bottom of the home page. Where are all the others? The arrows that you’d think would point you to more don’t work. Someone far more trusting than I would say ‘glitch maybe?’

I asked ‘Ruth’ how long she’d been investing with them?

“Two years.”

Oh. That’s disappointing. Ruth is lying. According to online records the domain was just registered recently, and the website is literally only 129 days old. Not exactly two years. Oops.

Wait a minute. The website says they’ve been in business since 2011 under the same name.

Maybe under a different domain name?

Asked the online chat admin.

Um…afraid not. Tradexpot.com was an expired website when it was registered on 2023-03-09, it wasn’t purchased from anyone, and it was registered by someone in Reykjavik, Iceland, not in the UK where its headquarters are supposedly. And the other two domains? Neither are expired because neither have EVER been registered.

Let’s look up their business registration.

From https://tradexpot.com/about/terms.php/

The Site is operated by TradeXpot, Inc. a company registered in England and Wales whose registered office is at Shire Park, Kestrel Way, Welwyn Garden City, AL7 1GA.

Company Reg. Number: 00445790

Okay. That number is all we need to look them up on the official UK business registry. What’s that tell us?

Yeah…that’s not them. Faked their reg #. TESCO is a huge grocery retailer. Pretty telling right there.

But wait…there’s more.

From their FAQs https://www.tradexpot.com/customer-service.php/

And this one

Just reading through their Frequently Asked Questions, you quickly get a sense that English is not the first language of whoever gave the ‘okay to publish’ on the website’s text.

More importantly, they aren’t registered by the FCA in the UK, nor the SEC or FINRA here in the US.

And, as you read above in what they offer, it turns out they DO offer 10% a ‘referral fee’ when someone convinces their trusting friends to invest. Ruth had an agenda beyond just sharing insightful knowledge it seems.

So yeah. Total scam website.

But if that wasn’t enough, I had to laugh at the brazen audacity of whoever this is when I read this blurb on their fake blog at the bottom of their home page (if you click the ‘Read Our Blog’ button or the side to side arrows next to ‘BLOG NEWS’ none go anywhere).

You’ll have to trust me on this, but I can guarantee that no one at Goldman Sachs has ever heard of TradeXpot, and not just because TradeXpot didn’t exist in 2019 or EVER have any offices anywhere in the US.

The second last sentence about serving “more than 203,000 clients across the United States” will be of special interest to fraud investigators at the SEC.

Bottom line, I kinda don’t feel bad for anyone that gets shredded by this scammer. If you’re that greedy or needy and don’t take the time to even look up whether the company is registered? You probably deserve that hard life lesson.

Don’t let that be you.

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