I felt powerless: how a crypto scam cost a finance boss £300,000

The Elaborate Six-Month Scam
A Gradual Escalation
The Airdrop Deception
The Descent into Hopelessness

Matthew Thomas, a senior manager at a UK investment firm, recently shared his harrowing experience of being swindled out of his £300,000 life savings by cryptocurrency scammers. Thomas’s story serves as a warning about the dangers of crypto fraud, especially at a time when new marketing rules for crypto firms in the UK aim to provide better protection for consumers.

The Elaborate Six-Month Scam

Thomas’s ordeal began in January when a friend introduced him to a cryptocurrency trading app that appeared to be based in the United States. Over the course of six months, he lost over £300,000 to scammers. Some of this amount, roughly £60,000, came from a mortgage loan, and an additional £20,000 was borrowed from his workplace, which he intends to repay in the coming years.

The scam initially seemed legitimate, but gradually the scammers employed various tactics to extract more money from Thomas. They presented the trading app’s strategy as a way to profit from cryptocurrency price differences across different exchanges, using AI bots to identify opportunities.

A Gradual Escalation

Initially, Thomas started with a small investment, and he genuinely made a profit as promised. However, the scammers gradually raised the stakes, demanding a minimum balance of $10,000 to continue. Despite some skepticism, Thomas agreed and continued to invest. Over the next couple of months, the account consistently generated profits of approximately 1% per day without any loss-making days.

The Airdrop Deception

Thomas was then told he qualified for an “airdrop” event, a common marketing strategy in the crypto world where new tokens are sent to existing wallet addresses. He was informed that he could earn extra profits by topping up his wallet balance to a specific amount. Initially, he agreed to participate in a $100,000 airdrop but was instead enrolled in a $200,000 airdrop without his consent.

Frustrated, Thomas borrowed additional funds to complete the airdrop, hoping to recover his money. However, the funds were not returned to his wallet as expected.

The Descent into Hopelessness

As the scam progressed, Thomas was continuously asked to deposit more funds. At each stage, he hoped to recoup his initial investment and therefore continued to borrow and invest. Ultimately, he lost his entire £300,000 life savings.

Despite reporting the scam to various authorities and regulators, Thomas’s story serves as a stark reminder of the dangers associated with cryptocurrency investments, especially when dealing with unfamiliar platforms and unverified promises. The UK’s Financial Conduct Authority continues to emphasize the high-risk nature of crypto assets and the potential for significant financial losses. Thomas’s experience highlights the need for caution and due diligence in the cryptocurrency space.