Scott Pape exposes crypto scammers online

Australian finance educator Scott Pape, popularly known as the "Barefoot Investor," has exposed how crypto scammers are using his likeness to deceive unsuspecting followers.

Pape revealed that hundreds of fake Facebook groups imitating his persona have been targeting users to promote fraudulent crypto schemes.

Pape and his team reported the fake Facebook groups, but instead of waiting for the platform to act, he took matters into his own hands.

Using a fake name, Pape engaged with the scammers directly, entering their schemes to understand their tactics and expose their methods.

After providing his phone number to one of the fake Facebook pages, Pape was invited to join a WhatsApp group called the "DB Wealth Institute."

A quick Google search revealed fabricated press releases about the so-called DB Wealth Institute, claiming it was founded by a "Professor Cillian Miller" and boasted over 30,000 trained students by 2024.

The press releases, which appeared on legitimate platforms like Yahoo Finance and LinkedIn, were part of the scam’s effort to appear credible.

Pape discovered that U.S. regulators had already issued warnings about such fake "wealth institutes" that lure victims with promises of crypto trading lessons and fake profits.

Pape observed that the WhatsApp group bussed with over 200 daily messages, most appearing to show users celebrating massive profits from trading signals given by the "professor."

Bots likely generated many of these messages to create an illusion of success and draw victims into the scam.

Pape was advised by the scam’s assistant, "Ally," to take a high-risk 100X long trade on an altcoin, which quickly returned an 81% profit in 10 minutes—an orchestrated move to build trust and excitement.

According to Pape, the scam involves three steps: building confidence, exploiting greed, and instilling fear.

After showing initial profits, the scammers "went in for the kill," bombarding Pape with messages urging him to invest larger amounts or take out loans to join exclusive investing programs.

Victims were encouraged to invest anywhere from $20,000 to $5 million, with promises of massive returns from "partner programs."

Pape, familiar with these tactics from helping other scam victims, decided to end his participation before the scammers could defraud him further.

He warned that scammers prey on victims’ desperation after initial losses, often pushing them to borrow money to "recover" stolen funds, leading to even greater losses.

"Once you realize you’ve been robbed, scammers prey on your desperation. The biggest losses happen after you realize you’ve been scammed," Pape explained.

Pape’s revelations come amid a surge in crypto scams, hacks, and exploits in 2024.

A recent Chainalysis report highlighted $2.2 billion lost to scams and hacks this year—a 21% increase from $1.8 billion in 2023.