Dylan (29) has now accepted his loss. He will probably never see the few thousand euros he put into an online crypto account. A company promised to go crypto for him mineHe just had to put in 4,000 euros.
Become rich for free, have a computer solve sums and collect the profits in cryptos themselves, who wouldn’t want that? But everything points to it: the company has run off with its money. When he asks what exactly is going on via the ‘help icon’ in the app, the ‘customer service’ proposes to transfer another 5,000 euros more. Wrong thing, says Dylan. “Even if I say one word in the helpdesk, they immediately start again about the 5,000 euros that I have to make up.”
Four thousand euros in savings. For him, that comes down to roughly two monthly salaries: a large amount to hand over, but he desperately needs the promised profits. His car is almost broken, and his girlfriend is at home with a WIA benefit.
Dylan is one of the many Dutch youngsters who are entering the crypto market. Rabobank and Nibud reported last year that more than a quarter of young people between the ages of 18 and 30 invest in crypto. Think of coins such as bitcoin, ether and tether.
Some go for the big money, others want to play with a few bucks. With the right knowledge in your pocket – and a dose of luck – there is, or has been, good money to be made from it. But the supervisory authority for the Financial Markets (AFM) and the Fraud Helpdesk also warn that the large losses and cases of fraud are piling up. Of all investment fraud reports that came in to the Fraud Helpdesk last year, nearly 30 percent – 158 of the 522 reports – were about crypto. And due to erratic price movements in the crypto market, there does not have to be a scammer in the game to suffer large losses.
The Fraud Helpdesk says that the number of reports of crypto fraud has increased more rapidly since May this year. So far, the agency has already received 94.
On social media, mainly financial success stories can be found, Dylan sees, who because of his privacy does not want to use his last name in the newspaper (his full name is known to the editors). For example from influencers. “They drive expensive cars and complain about their umpteenth jet lag that year.” There is little attention in advertisements for the dangers of crypto trading. In the meantime, you can’t ignore the advertisements along the road, the sports field and on TV.
The AFM, youth workers and social organizations such as Diversion and Nibud are therefore committed to providing better information about the risks of crypto investing. They travel across the country with their teaching packages, aimed at young people, who are the most vulnerable. Young people trade in crypto coins relatively often, and it is often more difficult for them to estimate the risks.
‘Parallel to drug trafficking’
Youth worker Martin Sarov encounters many young people who are in crypto. He specializes in radicalization issues, regularly takes to the streets and advises aldermen on ‘structural solutions’ to prevent young people from coming into contact with the police. He sees a parallel between crypto trading and, for example, selling drugs: you can earn money quickly with both.
According to Sarov, the motivations of young people to trade cryptos vary. Some distrust the current financial system, others are looking for quick money, others do it out of idealism, for pleasure or excitement, or for extra income.
Also read: Very rich thanks to crypto (but for how long?)
Brian de Zeeuw (23) mainly hoped that he could earn good money. Since April 2021, he has invested around 6,000 euros in various crypto coins, such as ripple and cardano. He has now lost about three quarters of his investment due to price falls. He tells his story by phone, while calling he sends screenshots of transactions.
De Zeeuw invested through various online accounts (wallet), at Bitvavo and Coinbase, among others. He came up with the idea of investing through an acquaintance he encountered every day. “He told about his winnings, that makes you greedy.” According to De Zeeuw, he was easily persuaded. “I just did what the other said, without doing my own research. Moreover, that knowledge earned ten times as much as I did, he could easily miss the money.”
He had saved about a year for the money with which De Zeeuw invested. It was therefore “depressing” to see the price drop. “I checked my phone several times a day at the time. Even before I opened the app, I got that bad feeling: would the price have dropped further?”
“It was a good life lesson. I will never invest in anything again without doing research first.” He is now too busy with his work in freight transport and does not look much at his investments anymore, he has “hardly any time for that”.
The only way to prevent such cases, according to youth worker Sarov, is to explain to young people how complicated it is to make a lot of money with crypto. “In the hope that they will refrain from doing so or take it easy first. I liken it to flying an airplane. It’s not impossible, but doing it safely and managing risks requires a lot of knowledge and expertise.”
As a private individual on the crypto market you compete with major players, or whales, as Sarov calls them. They launch a currency, for example trade with algorithms that optimize the transactions for them, or have enormous power because of the large amounts with which they trade. Be aware of these ‘big fish in the sea’, emphasizes Sarov. If you do go ahead with it, Sarov’s tip is to set a loss ceiling in your investment app.
Dire cases
As with the Fraud Helpdesk, the Netherlands Authority for the Financial Markets regularly receives questions and signals from young people who lose their investment due to erratic exchange rates, says a spokesperson. “There are distressing cases in between, for example young people who invest with borrowed money.” There are also reports of scams and misleading or unreliable information on social media, the spokesperson said. “It is hardly possible for us to determine per report whether it concerns fraud, ‘normal’ loss, or something in between.”
The cybercrime department of the police also sees an increase in the number of people being scammed in the crypto market. The police do not have precise figures, but they do call on victims to report the incident. “Then we can investigate and track down possible suspects or uncover connections. In this way, this form of fraud can be tackled.”
Also read: European banking supervisor concerned: not enough crypto experts for new law
Approached via WhatsApp
Dylan still has many questions about the crypto company he put his money into, which presented itself to him as Ethereum Main Network. He was approached via WhatsApp last June by a young woman who introduced him to this company. She urged him to open an account there. His app conversations and online bills are through NRC realized. “The bitcoin market has been so volatile since 2021,” the woman wrote in English. Ethereum Main Network promised to mine (mine through concatenated computers) ether, another popular cryptocurrency. “Think about mining. I went in and now have a stable income. Risks don’t bother me now,” said the woman.
The construction worked as follows: the woman texted him a link from a shady website to which he had to link his crypto account, which contained 4,000 euros. For example, Ethereum Main Network could mine for him. “Click here and send me a screenshot,” the woman wrote.
That’s how it happened, and indeed: Dylan saw his harvests increase every hour in the app, to an amount of 180 euros in a few days. He saw his second income, in addition to that from his work in logistics, already arise. But a few days after Dylan linked his crypto account, all his money was gone. Unwittingly, he had given the company access to his crypto account.
When Dylan contacted the helpdesk, he was urged to spend even more money, according to the messages from the helpdesk that NRC has seen: “Please transfer another EUR 5,000 deposit to your account so that you can use your mining pool proceeds. can record. Then your investment will be refunded to your account.”
Dylan doesn’t know how the woman who approached him via WhatsApp got his number, or if she really is who she says she is. Didn’t he find it strange that she approached him in this way, and soon started talking about mining? “I had my doubts, but at first I just thought it was funny to go into it.” The doubts came again later, but the woman continued to urge him, even when he expressed his doubts. “I never think about the risks, only about the goal,” she wrote. There were also not many negative reviews on scamadvisor.com.
Track ends
The trail to the owner of the website ends in a dead end, NRC also found after its own investigation. Despite several attempts to do so, including e-mails, we were unable to get in touch with the company. The company proved so unapproachable for comment. While Dylan has no hard evidence that the woman who approached him is collaborating with the folks at Ethereum Main Network, he suspects he is. Dylan has not yet filed a complaint against her or the company. Instead, he tries to befriend the woman. “How are you?” they ask each other every week. Who knows, he may one day get his money back through her. “All kinds of scenarios in which I could still get my money back are running through my head. I would prefer to give her a taste of her own medicine.”
With the cooperation of Rik Wassens