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Beijing time, March 17th morning news, it is reported that Sebastian will always remember the moment he lost 407,000 pounds (about 560,000 US dollars), angry and ashamed.
[“Fake Musk” tweeted: He cheated a German man out of 10 Bitcoins worth $560,000]
The night before was also an unforgettable night. Before going to bed, he and his wife watched a TV series on Netflix. After that, his wife went to bed, while he lay on the sofa playing with his phone.
Then he received a Twitter notification showing news from Elon Musk. Sebastian told the media: "Musk wrote on Twitter, 'Dojo 4 Doge?' I wonder what this means."
“There was also a link to a new event below, so I clicked on it and saw he was giving away Bitcoin!” There was also a timer counting down, and the site promised participants that they could double their money.
The campaign, apparently run by Elon Musk’s Tesla team, invites people to send anything from 0.1 bitcoin (worth around £4,300) to 20 bitcoin (around £860,000) and the team will send back double that amount.
Invest 10 Bitcoins
Sebastian double-checked the verification logo next to Elon Musk's name, then tried to decide whether to send 5 or 10 bitcoins. "'Take the maximum,' I thought, this is definitely true, so I sent 10 bitcoins."
For the next 20 minutes, as the timer ticked down, Sebastian waited for his prize to drop into his Bitcoin wallet. He sat at home in Cologne, Germany, refreshing his screen every 30 seconds. He had seen a new cryptic tweet from Musk on Twitter, so he was reassured by the giveaway news.
But slowly, as the timer on the site reached zero, Sebastian said, “I started to realize that this was a massive fraud.”
“I laid my head back against the couch cushions, my heart pounding. I thought, I’ve just thrown away everything: capital to improve my standard of living, my early retirement fund, and the chance to take a vacation with my kids.”
"I went upstairs, sat on the edge of the bed, and told my wife. I woke her up and told her I had made a big mistake, a very big mistake."
Sebastian didn’t sleep that night. Instead, he spent hours emailing scam sites and tweeting from a fake Elon Musk Twitter account in an attempt to get some or all of his funds back.
However, he eventually came to accept that the money was gone. 133 miles away in Amsterdam, analysts at blockchain analytics firm Whale Alert watched in horror as Sebastian’s 10 bitcoins were transferred and anonymously cashed out days later.
For months, Whale Alert has been trying to get authorities to take action against the scam, but the latter has taken no action.
Whale Alert analysts use a public ledger that shows all the movements of cryptocurrencies in real time to spot trends and track funds. They have identified which Bitcoin addresses, or wallets, are operated by so-called "giveaway scammers" and tracked the growing amounts of money they make. Sebastian's 10 Bitcoins is the most they have ever recorded losing in one transaction.
The amount of money stolen hit a record high
Researchers say scammers have made record amounts of money in 2021. They have made more than $18m (£13m) in the first three months of this year, compared with $16m for the whole of 2020.
The data also suggests that the number of victims this year is expected to exceed previous years. In 2020, about 10,500 people were deceived. But researchers said they have tracked down 5,600 remitters this year.
Whale Alert founder Frank van Weert said it was difficult to explain why the scam was not only prevalent but increasingly successful.
The criminals’ actual techniques haven’t changed much since the scam first emerged in 2018. They create Twitter accounts that look like those of celebrities like Elon Musk or billionaire investor Chamath Palihapitiya.
In some cases, like the one that spoofed Sebastian, criminals use stolen celebrity accounts to ensure they have the blue “verified” checkmark to make the accounts seem more credible.
They wait for real accounts to post on Twitter and post replies that make it look like the celebrities are posting a hoax to their millions of followers.
While Twitter is a popular platform, giveaway scams can also be found on YouTube, Facebook, and Instagram.
“We don’t have any data to explain this, but it could be related to the broader bitcoin market,” Waite said. “When the price of bitcoin goes up, people go crazy, and many of them are new to the market and they want the idea of making a quick buck.”
“It also sounds pretty plausible that someone like Elon Musk, a big supporter of cryptocurrency, would give away Bitcoin.”
“The people who are being scammed are not uneducated,” Waite said. “We’ve received emails from people who have lost their bitcoins and they are very articulate.”
Van Wert also believes that some of the larger cryptocurrency sites giving away free Bitcoin to promote their services may have contributed to the confusion.
I'm not stupid
Three weeks on, Sebastian is still deeply embarrassed. In an email conversation with a reporter, he insisted he was "not the biggest idiot in the world."
"I studied in IT and had a good job in marketing. I lived with my wife and two children and we had a nice house with a garden. I was greedy that night and it blinded me."
Sebastian, 42, first invested $40,000 in Bitcoin in 2017. He quickly recovered his investment as the value of Bitcoin rose on the open market. He cashed out and got his initial money back, and later felt excited as the value of those 10 Bitcoins rose to nearly €500,000.
It’s too easy to steal Bitcoin
Sebastian hopes that international organizations will take action against scammers and would like to see Bitcoin exchanges actively provide assistance.
“It’s too easy to steal bitcoin,” he said. “All exchanges should know who their customers are and know if a particular wallet address is being used by thieves.”
In fact, the most high-profile Bitcoin “giveaway” scam took place in July 2020, when Twitter was briefly hacked in a massive way that allowed scammers to post tweets using the accounts of celebrities like Bill Gates, Kim Kardashian-West, and Elon Musk.
In that incident, hackers stole more than $118,000 worth of Bitcoin and three people were arrested. |
