Beware the crypto conmen who are out to get you

‘These fraudsters see you as stepping stone, not a mother or father with savings to feed your children’ - Peter McGahan

Peter McGahan
Crypto conmen aren’t successful if they aren’t clever or charismatic (Zephyr18/Getty Images/iStockphoto)

I thought three columns on crypto currencies would do it, but its run on and on. Forgive me.

We have had numerous calls regarding fraud, and they will grow. Some are six figure numbers, police and fraud are involved, and intelligent people are being sucked in. I’ll cover some research and issues to look for here, in addition to the previous five columns I’ve completed this year. If you haven’t seen them, email for a copy as a one way read-through.

Firstly, we are all at a disadvantage to sociopaths and criminals who we just can’t compete with. While we are wary, we still believe that ‘someone wouldn’t do something like that’ which leaves you wide open to fraud. We think it’s terrible and measure faudsters via our moral compass knowing that our mothers would twang a wooden spoon off the back of our heads.

Sociopaths? Well, they have no conscience. Google ‘the brain of a sociopath’. Seriously. The part of the brain that deals with empathy is in sleep mode. Don’t expect them to play fair. That’s not a good use of your time.

Conmen aren’t successful if they aren’t clever or charismatic. Guess what the characteristics of a sociopath are? They see you as their stepping stone, not a mother or father with savings to feed your children. They see you as stupid, weak and their opportunity. Forcing your view of fairness onto them and measuring them via that is their advantage over you. You cannot compete with that so stay out of that boxing ring.

Their schemes are cleverly designed, created by psychologists and delivered by artificial intelligence which targets millions in under a second on the basis that at each stage of the buy-in there will be a fall off, but at the end there will be some left who plunder huge amounts of capital.

You can buy crypto currencies, or you can buy into brokers, schemes, funds, future prices of crypto currencies. A crypto currency has a purpose not a value, and if it does have a ‘value’ it’s made up. Bitcoin will rise and rise, and it will, until it doesn’t. Its ‘valuation’ technique is meaningless. The truth is, there is no ‘it’.

There is due diligence if you want to look at crypto currencies, but I will tell you now that I don’t know anyone capable of fully understanding that research when you have it all in front of you.

Check their white paper reviews or any technical information they have. In there you will see the credibility – good luck.

Check their website and review the team and projects goals, what tech they are using, the team members. This should be highly detailed. Look at the background of all the team members. When you have researched that, remember Sam Bankman-Fried is in jail now, and everyone researched him but ignored key points that were big bright lights in a train tunnel.

Peter McGahan (Mal McCann)

Check to see if it fits with regulatory compliance, look for independent reviews – not Trustpilot or the equivalent as they can use artificial intelligence to have those auto filled.

Check the industry watchdogs for scam alerts. Community alerts and social media – forget the nice things they say as they can be populated and responded to via bots in milliseconds but look for the risks or downsides they are referring to.

In Einstein’s words: “If you couldn’t explain it simply, you didn’t understand it”, and therefore you shouldn’t be anywhere near it as you will either be congratulating yourself for an uneducated decision based on hope, or beating yourself up for a ludicrous decision you can’t quantify.

  • Peter McGahan is chief executive of independent financial adviser Worldwide Financial Planning, which is authorised and regulated by the Financial Conduct Authority. If you would like a fact-sheet with all my previous columns, or if you have a financial query, call 028 6863 2692.