The art of the con is as old as the world itself, with tricks and games pre-dating recorded history. However, the emergence of cryptographic currency – combined with its relatively young, barely regulated industry – has enabled the rise of a new kind of scam artist: the ‘rip-deal gangs’.
The fraudsters behind these scams first use a highly sophisticated ruse that has become known as the ‘crypto long con’. After spending weeks or months courting blockchain-project executives, they weave elaborate and impressive-sounding tales of investments and promise large amounts of money. When their victims agree to meet in person, the scammers keep them off balance with clever misdirection and deceptive tactics. In a few cases, they’ve even gone so far as to tamp down victims’ suspicions by presenting an electronic version of a non-disclosure agreement.
Once they’ve gained the trust of their victims, they direct the victims to set up wallets that allow them access to the victim’s newfound stash. But when the funds are sent over, the scammers are somehow able to drain the wallets – whether through nefarious means, private key exploitation or security flaws.
One of the most famous victims so far is Ahad Shams of Webaverse, who was scammed out of $4 million earlier this month after meeting a fraudster in person in Rome.
The details of his case are strikingly similar to those described in a German police officer’s report on the rise of rip-deal gangs, who often operate across multiple jurisdictions to make tracing their movements incredibly difficult.
Other victims have taken to a Telegram group to share information, while some of the so-called victims in the group have been quickly suspected of fraud themselves.
These rip-deal gangs are just one example of the fraudsters exploiting the relative anonymity and lack of regulation that comes with crypto trading. Others have been seen in Europe, including Austria, Italy and Germany, while victims of similar scams in the U.S. lost a whopping $185 million in romance scams in 2021.
Even more troubling is the name that seems to crop up in many of these victims’ accounts: Joseph Safra. Although it’s unclear who this individual is or whether he’s actually connected to the scammers at all, his mysterious presence haunts many of the victims’ recollections.
On a personal level, these scams are an absolute tragedy for their victims, leaving them feeling drained, robbed and unable to trust other people. But on a broader level, these scams leave a far more insidious legacy on the crypto industry.
Whether they realize it or not, these scam artists have subtly undermined public trust in the nascent cryptocurrency markets and reinforced bad stereotypes. As more and more money flows into the crypto industry, so too must a corresponding increase in trust – both in terms of individual users and the industry as a whole.
Until then, it will be up to law enforcement to catch – and hopefully prosecute – those behind this new breed of con artist. Until authorities can confidently stop those behind the billion-dollar blockchain ‘rip-deal gangs’, their masterful scams may continue to enslave more innocent victims.
