German man loses 400k GBP about $500k in Twitter Bitcoin scam
bbc.com
bbc.com
This is a vulnerability in Twitter's verification policy that Twitter refuses to fix. Originally, verification was supposed to mean "this person is who they say they are". But once an account is verified, you can change the name/profile picture to someone else. So hackers get access to minor verified accounts, change the profile to match Elon, and then they have a "verified" Elon Musk account to scam with.
Twitter could fix this tomorrow by requiring that verification be tied to the name you got verified with, and if you do need to change your name you go through an (expedited) re-verification process. That doesn't seem like a lot to ask considering what "verification" is supposed to mean, and what (as evidenced by this article) users of the site take it to mean.
And tbh people shouldn't be trusting even the verified real account on something like this, given it's been hacked to push this exact scam before, and even under the control of actual Elon it tweets about imaginary investors taking TSLA to $420 and other stuff he thinks is funny at the time.
In other words I want to know if this is Bill Evans the pianist, not Bill Evans the saxophonist or any other Bill Evans who is not even a musician or someone pretending to be one of them. Can social networks solve this? (I know, Bill Evans the pianist died a long time ago. Big fan of him)
Sure, greed motivates people, but in this case greed would not have motivated him to continue if he saw that the account was not verified and not Elon’s. If anything the check provided him with the confidence to continue more than anything else.
It's Bitcoin though. The volatility and returns in this bubble have been enormous, so its quite possible for "life-changing amounts of money" to not feel like that, because it was cheap and easy to get.
I can confirm this. I ran a miner early on in a completely unserious way, and only recently bothered to dig up the wallet from an old hard drive to sell it. Even though it was worth thousands of dollars, I felt about that Bitcoin like a feel about an old hard drive: not worthless, but not particularly valuable, either.
Also, the cryptolottery has handsomely rewarded many people for doing absolutely no due diligence. I mean, if you were someone who bought Bitcoin at the beginning, you probably did it on Mt. Gox, which looked like a garbage fire to anyone who did a little due diligence (and actually turned out to be one).
- Him having made so much money on a highly speculative asset, at one point having decided to pour a significant amount of money into it in the first place and it paying off? Almost certainly.
- Musk's seemingly irrational nature, tendency to do crazy things, to the point of that a 'fan' of his would actually deem him capable of doing a bitcoin giveaway? Almost certainly. You most likely wouldn't even believe this, verified or not, if it was a more 'reputable' CEO tweeting this.
- Current social media investing frenzy from stocks to altcoins to everything in between? The speed of social media, hype, buy and dump activism? People desperately trying to find their own 'opportunity' to strike gold? Imagine he wakes up the next morning, the giveaway was real, and what regrets would he have? Urgency forces stupid decisions.
I am not trying to attribute responsibility, but there are quite a few factors at play here, and they explain why he did what he did. Not trying to pass judgement on him, but at that very moment, he was a gambler, a speculator, not an investor or rational person. And then this happens. It happens to people in the financial industry all the time.
If someone unfamiliar with the workings of the financial/legal system and the Internet goes to some website that looks trustworthy to them - looks like other websites they trust, has gushing testimonials, large numbers, and TrustSeal(R) graphics proclaiming that it's Guaranteed and Secured, and there are posts on Twitter and Facebook that say this site is trustworthy, and some blogger has also rated them highly... they may believe they've done their due diligence.
They're not a fool, they're simply uninformed, and they don't know they're uninformed, and they don't know they don't know they're uninformed. The information age is changing fast - it's pretty recent in human history that you have to distrust published writing as much as you do today - and some people are unable to keep up.
But due diligence was done here - the blue check mark was checked. The user checked other people were seeing success with this. The user probably double and triple checked the bitcoin address he was sending to. He probably looked for the padlock symbol on the site he was getting the details of the scam from. He might have checked his computer for viruses and been using a hardware wallet with a really long password.
He just checked all the wrong things.
> He cashed out and got his initial money back, but then watched excitedly over the years as the 10 coins grew to be worth nearly 500,000 euros.
Fortunately this sounds like he didn't lose anything, just never realised extra gains. I know it's slightly nitpicking, but losing your actual $500k and losing $500k unrealised gains from a gamble is a massive difference. Especially if you already withdrew the original investment.
Think about it: You inherit $500k. You lose it through a scam or a bet or gambling. Do you think it doesn't matter? I mean, you didn't earn that money yourself, right?
There are no paper losses and no "unrealized gains". It's your money and if it's gone, it's gone. Doesn't matter how you earned it.
I don't know how it works in Germany though.
Bitcoin is tax-free after a holding period of 1 year afaik.
If you lose $500k, you don't owe taxes, congratulations. But you still lost money (even if you maybe only lost $300k, because the rest would've been taxes).
Sounds like if someones house caught fire the owner did not loose anything because he did not sell it?
That were His bitcoins he was the owner of the bicoins and he was scammed.
If he had sold the bitcoins for cash and then used the cash to buy bitcoins again immediately after so that he could send them to the scammer, then would they be "realized" as opposed to "unrealized", even though there's no practical difference between the two situations?
You don't have opportunity to withdraw it - you've got the right to do it.
I think it makes a big difference. "I'll gamble my 10 BTC" and "I'll exchange my actual $500k to gamble as BTC" would have a very different threshold for action. I suspect he wouldn't do that with real money.
Same reason F2P games get you to exchange money into tokens (some even twice) to make you lose connection to the real value.
> "I'll gamble my 10 BTC" and "I'll exchange my actual $500k to gamble as BTC" would have a very different threshold for action
For a rational investor, they shouldn't.
But he didn't lose anything but opportunity costs and because he cashed out his initial gambling money, he is not worse off than if he didn't gamble with Bitcoin to begin with.
Coming out of the crypto game with a big fat zero is better than many others who tried it.
EDIT: Thinking about it, it's technically difficult see the difference between Bitcoin (which will continue to be worth more) and other get rich quick schemes that may not have the same chance of success and directly being conned for money by people.
And the type that got rich off BitCoin are way bigger risk-takers than average - I was offered to "get in" on BitCoin at 1000 dollars and I thought it too risky, my former coworker who did and got rich is very much an adrenaline junkie (but didn't fall for this scam fortunately).
It is amazing how people fall for these scams.
They seem to forget the time tested truth which is "if it sounds too good to be true then it ain't".
I'm ambivalent about the tech, economics, environmental impact, but what ticks me off about BTC and crypto is the proselytizing idiots that it attracts - it's the modern day Jehovah's Witnesses. I rented an office recently and there was a bunch of "bitcoin investment strategists" in the space next to me, and this one guy in particular trying to sell me on the idea that we should get into blockchain development because that's going to be the future of everything ... You could sum the guy up as mouth breeding idiot on first impression and that didn't change as he kept talking. Really typical for the crowd IMO.
Our education systems no longer equip people to handle the modern world.
But note that the person in question has studied and works at a marketing position in the IT industry. Not sure if he qualifies for "average".
All kinds of people can be stupid at times.
There's lots of other ways you can fail. First how you obtain the large enough account to announce the scam. Then how you move the money to mixers. Then how you withdraw it. And likely a few steps in between. Also you can fail by telling someone about your scam - this happens a lot - many court cases have fun conversation records where the accused bragged to undercover police officers.
https://arstechnica.com/tech-policy/2021/03/i-was-a-teenage-...
Granted this case was much more high profile though.
So that's a reason not to, unless you're already in deep.
This article is yet another amazing illustration of why that's definitely two features you want from something that's intended to be used as a currency.
Would you make an argument like "Wow, it's sure a nice feature that [full disk encryption software] doesn't have any way to reset lost passwords" on an article about someone losing their life's work due to misunderstanding the consequences of full disk encryption?
I fell for that, once, when I was 8, with virtual money, playing an online game. How can an adult be this gullible...
Genuinely interested how the coins were cashed out anonymously. Pretty much all exchanges require KYC these days, and Bitcoin addresses can be tracked and blacklisted if the right processes are put in place, in theory at least.
Classic money laundering.
Sure, some scames are complicated - credit swaps, sub prime mortagges, etc, I can see why people fall for that. Sometimes you're relying n a greater fool, sometimes you're relying on unlikely events (horse winning etc), because you value the potential reward more than the risk. All of that's rational - hell even buying a lottery ticket is rational for many people.
But in all those areas I can see why the other person is involved and what they're getting. My risk/reward ratio is different to theirs.
I go into a greater-fool situation and yes, I expect that I'll find a greater fool, the person selling me the $whatever doesn't.
I could buy a Tesla and think that they will take over the entire planet's energy grid. I can see why someone is selling me a TSLA share at $800 (they don't think tesla is worth that much), that's reasonable.
I could even see a transaction where I give my email address to "Elon" and he sends me money, because he's a gajillionaire and doesn't value it, but does value email addresses, or maybe a transaction where I make or share a DOGE meme and he likes it, so gives me money instead of a "like".
But what possible reason would there be for me to send Elon Musk money and him to send it back? Why would he do this? Why not just send me the money for sharing a DOGE meme or something? Or just send it for being the first person to click his link?
1. Why would anyone give away free bitcoin in large amounts? Seriously, why? That should already have been an end to this.
2. If the screenshot is representative, it is clearly "@JoshyMcB" tweeting, not @elonmusk. It should take much more than an icon and a not-quite-matching display name to suggest it's the same person, and a tweet from @JoshyMcB[0] later the same day makes it clear he was hacked. There are more differences than similarities in that screenshot.
3. He got this part right: "I was greedy that night and it made me blind."
By presenting themselves to zillions of people, these scammers ensure that they will catch at least some people who happen to not be thinking correctly at the moment. People who will fall for the scam, and then slap their foreheads 15 minutes later wondering what the hell they were thinking.
There's something interesting to it. As if we as a society allow (or condemn less) preying on the "weak" and uninformed
Some people want money to feel safe, or to change their life.
I'll take my 7%+ average over the last 100 years vs the "insured" 0.5% my bank proposes me (which doesn't even pay for what my bank charges me monthly)
It is a fine critism to say that the bank uses your money to invest for itself, and you would rather use your money to invest for yourself; or that you would rather have input in what your money gets invested in for reasons other than financial return.
I'm not sure why you put "insured" in quotes. Do you have doubts about the FDIC?
You get nothing, they get everything
At least, according to my accountant a year or so ago, may have changed since..
Taxes can be a bit weird with investments in general. eg if you invest in a mutual fund that reinvests dividends, you only pay tax when you realise gains, whereas if you invested in an equivalent mutual fund that didn’t reinvest dividends but reinvested them yourself, you would be liable for tax on the dividends before reinvesting them which means less compounding. Obviously this all massively depends on local laws and weird specifics.
Really? Most m(b)illionaires, however eccentric, typically don't go around doing the equivalent of throwing money from rooftops, especially not by means of blurry Times New Roman text on a GIF directing you to some .info website.
I can understand some people such as older and less tech savvy people getting caught up in scams but an otherwise intelligent early 40s person working in the IT industry?! I just don't understand how he fell for it. I guess the only answer is greed overrode his better judgement.
Admittedly still a chunk of change to have invested in a risky asset like bitcoin but it's not like he earned 400k by being "smart enough" and then emptied it into bitcoin.
It is not.