Compiled & Edited: TechFlow
Host: Mariana Van Zeller
Video Source: National Geographic
Original Title: Crypto Scams (Full Episode) | Trafficked with Mariana Van Zeller | Nat Geo
Air Date: March 3, 2025
The Shadow of Dubai: Confessions of a Scam Operator
In a luxurious villa on Palm Jumeirah in Dubai, a mysterious figure was interviewed. This villa costs $15,000 per week to rent, and the sunlight shines on the $250,000 worth of jewelry he is wearing, sparkling. "This is a legal way of stealing," he says casually, with a hint of unsettling pride in his tone. This self-proclaimed "Mr. X," the operator of a Crypto Scam, calmly describes how he can design a scam that can defraud tens of millions of dollars in just 15 minutes, as if it were the most ordinary thing.
Through this exclusive interview, Mariana Van Zeller, the host of National Geographic's "Trafficked," reveals the little-known side of the crypto world - the modus operandi of the scams that steal billions of dollars from ordinary investors every year. From the designers of the scams to the victims who have lost their life savings, and the FBI agents dedicated to combating such crimes, this episode comprehensively presents the brutal reality behind the largely unregulated era of digital wealth.
Highlights from the Interview
Mr. X (Scam Operator)
"This is a legal way of stealing. This is a legal way to make money."
"A successful marketing campaign, through the promotion of multiple KOLs, can easily earn around $69 million."
"In Dubai, we know people with privileges who can help us get out of trouble. There are no lawsuits here, and we can escape many things."
"That's because they have weak minds. Don't invest money you can't afford to lose, understand? Who would do that?"
"If you're going to put your life savings into a token and don't even do a 5-minute Google search, I think they're the stupidest people on Earth."
"How to get caught? Who's going to catch us? The crypto police? No one will help those investors."
Robert (Crypto Enthusiast Turned Volunteer Cop)
"When the dust settled, I was left with $86. The feeling is indescribable, emotionally devastating."
"We may have saved thousands of people hundreds of millions of dollars in losses. But it's not easy, we've even received death threats."
"We monitor newly launched tokens, looking for signs of suspicious activity. For example, when you see a token drop 85% in 24 hours but only 3% in the past hour, it usually means someone is dumping heavily."
"A legitimate project will go to great lengths to prove the safety of the funds to investors, not avoid questions."
"When a project's developers become defensive when questioned, or directly remove questioners from the chat, it's almost certainly a scam."
Xavier (Crypto Enthusiast)
"It's shocking that so many people can do this and still get away with it. I personally know some people who have lost their life savings because of this."
"I've been scammed 7 or 8 times myself, first investing $500, then losing nearly $10,000 the next time."
"People don't like to read, don't like to research, they just blindly follow the trends, following the influencers on social media."
"In the decentralized finance world, there are no rules and no protections. When you get scammed, you can only blame yourself, and there's no way to recover the funds."
FBI Representative
"We do hear a lot about how there are a lot of gray areas and undefined territories in cryptocurrency, that this is not money, so the money rules don't apply. But when an individual invests based on specific promises that are not delivered, that is fraud. Fraud is fraud."
"We often find that new technologies are often first adopted by predatory individuals. In the past year, we've seen crypto-related fraud grow exponentially."
"People often say the FBI always gets their target, whether it's today or tomorrow. Those seeking to harm our system should be on alert, because we are watching."
The Basics of the "Rug Pull" Scam
Mariana: Can you explain how the "Rug Pull" scam works?
Xavier (Crypto Enthusiast, the one who initially explained the scam to host Mariana):
Let me use the example of Margherita coin to explain how this scam works. When we launch a token, let's say it's a scam token, the scammers have already purchased a large amount of this token at a very low price. As people start buying and the price goes up, the token's liquidity and value also increase. At this point, more investors will rush in, and influencers on social media will constantly promote the product.
Regular new investors see this and think, "I have to get in right away, it looks great, it's constantly going up, everyone's buying it." But just as the token's hype reaches its peak, the scammers will "Rug Pull" - sell off all their holdings and let the price crash. This is the "Rug Pull" scam.
It's shocking that so many people can do this and still get away with it. I personally know some people who have lost their life savings because of this.
Mariana: How important is understanding this type of scam for regular investors?
Xavier:
Extremely important. I've been scammed 7 or 8 times myself, first investing $500, then losing nearly $10,000 the next time. That's the problem - people don't like to read, don't like to research, they just blindly follow the trends, following the influencers on social media. However, in the decentralized finance world, there are no rules and no protections. When you get scammed, you can only blame yourself, and there's no way to recover the funds.
Inside Scoop: Dialogue with Mr. X
Mariana: Have you been a victim yourself?
Mr. X:
Yes, every crypto trader has experienced a "Rug Pull." So I thought, since this is happening, I might as well figure out how they're doing it, how to make money like them.
Mariana: Why are you interested in this?
Mr. X:
Because it's easy money. This is Easy Money.
Mariana: How much can you make from one of your scams?
Mr. X:
A successful marketing campaign, through the promotion of multiple influential people, can easily earn around $69 million.
Mariana: Don't you think this is theft?
Mr. X:
No, this is a "legal way of stealing." This is a legal way to make money.
Mariana: If this is legal, why do you wear masks? Why don't you do this openly?
Mr. X:
This is because my face is recognizable to many people. This is my promoter (Shiller), who has hundreds of thousands of followers and connections with celebrities. If we are recognized, it will end our way of life.
Mariana: What is your way of life like?
Mr. X:
Luxurious. We rent six villas in Dubai, each costing $15,000 per week. Our team of 20 people travels together. The jewelry I wear on a daily basis is worth over $250,000. We drive luxury cars worth tens of thousands of dollars and live in the most expensive area of Palm Island. Here (in Dubai), we know privileged people who can help us avoid trouble. There are no lawsuits here, and we can escape many things.
Mariana: Do you feel guilty towards those who have lost everything? We've heard that some have committed suicide because of such scams.
Mr. X:
That's weak minded. Don't invest money you can't afford to lose, understand? Who would do that?
If you're going to put your life savings into a token and can't be bothered to do a 5-minute Google search, I think they're the stupidest people on Earth.
Mariana: Aren't you afraid of getting caught?
Mr. X:
How would we get caught? Who's going to catch us? The crypto police? No one is going to help those investors.
We're not worried about the law catching up with us, that's just not possible. It's almost impossible to detect where we are, and they can't track us.
Mariana: Where do you spend the money?
Mr. X:
Investments, bank accounts, family members' accounts, people with legitimate businesses, shoes, clothes, designer brands, jewelry. I feel great, this is the feeling of freedom.
The Story of a Victim Turned Volunteer Cop
Robert (a crypto scam victim turned volunteer cop):
A few years ago, I was diagnosed with cancer, which gave me more time to slow down and focus on life and investments. One day, my son came to me and said, "Hey, dad, you should look into cryptocurrencies." I started researching and invested some funds, and I got a decent return.
One day, I participated in a token launch. It had been delayed several times, and the developers were young and not fully transparent. On the day of the launch, the developers sold off all their holdings, and it looked like a massive "Rug Pull." When the dust settled, I was left with $86. The feeling is indescribable, emotionally devastating. Knowing others were going through this as well, I decided I had to do something, and it had to start with me.
Now we offer bounties, encouraging people to report suspicious activities. In the last 30 days, we've paid out around $17,500 in bounties. This money comes from our own token, used to fund our mission.
We may have saved thousands of people hundreds of millions of dollars in losses. But it's not easy, and we've even received death threats.
Mariana: How do you identify scams?
Robert:
We monitor new token launches, looking for signs of suspicious activity. For example, when you see a token drop 85% in 24 hours, but only 3% in the past hour, that usually indicates someone is dumping heavily. We'll join their online discussions and "AMAs," asking direct questions.
When a project's developers become defensive when questioned, or directly remove questioners from the chat, that's almost a sure sign of a scam. A legitimate project will go to great lengths to prove their funds are secure to investors, not avoid questions. We've had one investor reach out to us, who had invested in a project we confirmed was a scam, and we helped them avoid further losses.
Law Enforcement's Perspective
FBI Representative:
The FBI has seen many crypto scams. We do hear a lot of talk about the gray areas and undefined territories in crypto, that it's not money, so the money rules don't apply. But when individuals invest based on specific promises that are not delivered, that is fraud. Fraud is fraud.
We often find that new technologies are first adopted by predatory individuals. In the past year, we've seen crypto-related fraud grow exponentially.
The fraudsters behind "Rug Pull" scams must have internal justifications for their actions. It may be that they think the victims should have been more careful, or that this is just how the technology works, and the victims' lack of understanding is their problem.
The same argument would be, "Because I can get into your house, I can rob you." They are criminal enterprises trying to steal from hard-earned money. We will ensure these actors face legal consequences.
FBI Representative:
People often say the FBI always gets their target, whether today or tomorrow. So those seeking to harm our system should be on constant alert, because we are watching.
Future Trends and Warnings
Mariana:
In mid-2022, cryptocurrencies lost over $2 trillion from their previous year's highs, a period known as the "Crypto Winter." Predictably, investors have become more cautious, making "Rug Pull" scams harder to execute.
However, as the market cyclically recovers, the scammers will likely make a comeback. As Mr. X said, people are still investing in new tokens, and the scammers will continue to steal their money, continue to defraud, and continue to spend the ill-gotten gains on gold and diamonds.
Xavier's Advice:
Before investing in anything, you need to do thorough research.
Mr. X's "Advice":
Don't invest money you can't afford to lose.
Key Insights
The allure of crypto scams lies in the promise of quick riches, attracting investors who don't understand the complexities of the field ("I missed out on Google. I missed out on Apple. So I didn't want to miss out on this.")
Social media and celebrity endorsements play a key role in the proliferation of fraudulent projects, including Kim Kardashian being fined nearly $1.3 million for undisclosed promotional fees
Scammers are often tech-savvy young people who are oblivious to the moral implications of their actions
The "Wild West" nature of decentralized finance makes it particularly difficult to track and regulate scams
Even during market downturns, scammers can still find victims, demonstrating the persistent human greed and desire for overnight wealth
Regardless of how the cryptocurrency market evolves, one clear fact remains: investors will continue to face significant risks without thorough understanding and cautious investment. As repeatedly emphasized in the program: "Do your research" and "Don't invest what you can't lose".
