Me, Lark Davis, the crypto guy on Youtube, got hit by the scammers. It happens to us all at some point. But, yes, I was once scammed in crypto too, and here’s what happened. 

How It All Went Down

Well, early in my investing days, I used to use Local Bitcoins to buy and sell crypto. At the time it was one of the better options for moving to and from fiat in New Zealand. Anyway, I had a bit of Bitcoin (around 0.25 BTC if memory serves right) that I had gotten from a client and wanted to cash out into fiat. So off I went to Local Bitcoins to sell it. 

Everything was pretty normal. I found a buyer, who was offering a slightly better rate than other buyers. I contacted them and then proceeded with the sale. However, there was one slight red flag, which turned out to be a HUGE RED FLAG. This user had not confirmed their phone number. But again, everything else checked out. 

They had lots of good reviews from a year or two before but hadn’t been using their account in a while. He probably had a good excuse for it, I don’t remember, but it didn’t raise any suspicions with me. So except for that one little detail about their phone. Everything seemed fine. 

So… I went ahead with the sale. The guy was very pushy in getting the BTC released, but I told him that I had to wait until I saw the funds in my bank account. This was another red flag by the way. Anyway, after a few minutes, the funds did arrive in my bank account. All good so far. So, I released the Bitcoin. 

Then, about 10 minutes later the call came from the bank that I had just received stolen funds into my account from a hacked bank account. I was shocked. I was angry. I had worked hard for that Bitcoin, and that amount of money was a lot to me. 

But it was done. 

The Bitcoin was gone. 

My money was gone. 

It was pretty upsetting, to say the least. 

So, How Did I Get Scammed?

What had happened was that the user had had their Local Bitcoins account hacked which is why their phone confirmation was not confirmed. Ignoring that red flag cost me a lot of money. 

Sadly, this kind of thing is all too common in crypto. It was an expensive but very important lesson for me in my early days as an investor. It has made me much more cautious since then. And perhaps this (now) small loss early on saved me from bigger losses later. 

How to Avoid Getting Scammed in Crypto: A few tips by Lark Davis:

Long story short, anyone can fall victim to a scammer. So I wanted to share a few tips on how you can avoid being scammed in crypto! 

1. Listen to your gut if something feels wrong. 

For me, that unconfirmed phone was a red flag that I ignored to my peril! But, often in these situations, our spidey sense is going off anyway and we proceed in spite of it. If in doubt, phone a friend! For real. Call a friend and ask an outside observer if this sounds suspicious or too good to be true. 

2. Never be rushed into things. 

Time pressure is a common scamming tactic that makes you think things have to happen now or you will miss out. Take your time and think about it. 99.95% of the time there is no reason to rush. 

3. Watch out for impersonators. 

Ever see those scammer bots or ads saying that if you send 1 Bitcoin that someone like Elon Musk will send you back 10 Bitcoin? Yeah, that is not a thing. That is a scam. Elon Musk is not sitting around giving out billions in Bitcoin. He is also not in your DMs asking you to invest your money in a Bitcoin mining company. Scammers frequently pretend to be business people, celebs, and yes even crypto influencers. 

4. Never send money to people online. 

You will most likely be approached at some point by someone saying they have some Bitcoin mining or trading bot that will make you crazy amounts of money. They don’t. The comment sections of social media are filled with “brokers” who have the best deal in the world just for you. Be Careful! 

5. Don’t get phished!

One of the most common ways that people get scammed in crypto is by giving away their private keys in a phishing scam. It could be an official-looking email from Metamask or Coinbase saying you need to enter your keys or risk losing your account. That is a scam. Never give out your private keys. Never keep them online. Write them down on a piece of paper and put them somewhere safe! 

6. Blackmail. 

This is when you will get an email saying that you have been recorded visiting adult sites and that you must pay Bitcoin to them within 24 hours or they will send pictures of you “enjoying” those sites to your friends, co-workers, and family. This is a scam. They do not have those photos and simply rely on your fear. 

Don’t Get Scared, and Don’t Let it Stop You.

But all of the warnings in the world may still not protect you from getting scammed. Don’t let it stop you from investing if it happens to you. It happens to all of us at some point. The trick is to not let it wash you out of the market. Learn the lesson, dust yourself off, and get back in the saddle. Crypto is the most exciting market in the world and the one which offers the biggest potential for gains. If you walk away and never get your financial freedom, then the scammers truly did win!