Comment by Animats | Hacker News Reader

Comment by Animats | Hacker News Reader

In this case, the victim deposited the money into a fake crypto platform that told him his investments were performing well, presumably to entice him to deposit even more. Of course, once he tried to withdraw the money, he found he was unable to.

That sounds just like the "binary option" business which used to be run out of Israel. The Times of Israel blew that apart with "The Wolves of Tel Aviv" investigation series.[1] The binary option companies would hire new immigrants to Israel and put them in a call center to cold call and sell binary options sold by fake brokerages. The companies wanted people who spoke a foreign language so they could sell in that language. Scamming people outside Israel was legal in Israel at the time.

When, after years of scams, the State of Israel finally made that illegal, some of the binary options scammers moved into crypto. (Others moved to Bulgaria, where binary options were legal until a crackdown in 2021.) But the pattern is the same. Cold-contact, make friends, get people to invest in a fake brokerage, provide fake statements showing a win, refuse withdrawals.

[1] https://www.timesofisrael.com/the-wolves-of-tel-aviv-israels...

> Scamming people outside Israel was legal in Israel at the time.

My head just exploded here. I think I need to go lie down. Please nobody tell the Florida legislature about this.

In Russia you can hack foregin countries too :)

The problem with Russia is not the law, but lack of willingness to cooperate.

Quite real, though. Until it became so embarrassing to Israel that the law was changed in 2017.[1] The Times of Israel: "The crooks are still out there. Some binary options firms have closed down. Others have relocated overseas, including to Cyprus and Ukraine. Some of the prime movers and shakers have already adjusted their focus to other fraudulent fields — in the fields of diamond sales, cryptocurrencies, initial coin offerings and predatory business loans. Top scammers are still enjoying the vast overseas bank accounts, the yachts, luxury cars, exotic holidays and other profits of their ill-gotten gains." [2] That's a good article, and talks about the lobbyists, the political connections, and the refusal of the Israeli police to act.

The investigative reporter who broke the story, Simona Weinglass, frequently reports on how the Israeli financial scam industry has grown and changed. "Another 2 leading Israeli blockchain pioneers named as suspects in vast crypto scam"[3] A former Celsius CFO was one of them. Celsius, of course, denied there was a problem. That story was back in in March, three months before the Celsius collapse.

Somewhere, behind this new wrong-number/fake broker thing, there is probably an organized criminal enterprise.

[1] https://www.jpost.com/Business-and-Innovation/Israeli-minist...

[2] https://www.timesofisrael.com/why-binary-options-ban-is-only...

[3] https://www.timesofisrael.com/another-2-leading-israeli-bloc...

Florida has been selling swampland to gullible retirees from other states for a long time.

"These are the new leads. These are the Glengarry leads. And to you they're gold, and you don't get them."

I don't know that "Scamming people outside Israel was legal in Israel at the time" is how I would describe something banned domestically in March 2016 and completely in October 2017. It's not wrong but it comes across as misleading. That's disposing of a toxic industry but having to do it twice to make it stick.

Source: https://en.wikipedia.org/wiki/Binary_option#Israel

the binary options guys were obvious scams to everyone but their victims, but if someone cold calls you to sell investments and you give them money you'd probably fall for a bunch of different scams.

What exactly is your point? Should it be legal to scam gullible people? The victims deserved it? The scammers are doing everyone a favor?

I'm having trouble parsing your intent here...

thats because you aren't interested in what I said, you're interested in trying to read my mind for intent, which has caused you to apparently assume the worst about me in every possible sense. Who needs to engage with that? not me.

That is true of most scams. They're tuned for one group of people over another. Everybody has weaknesses.

Having been on the internet a long time, I have seen a lot of people on forums, this one included, do the how-dumb-are-they routine about scams. I suspect a notable fraction of those people have gotten taken in the meantime. Look at how much of the cryptocurrency space, for example, plays on people's wanting to be seen as smart, superior, and technically savvy. That motivation drives a lot of learning and technical exploration, but it also makes people vulnerable.

Some of it is timing and bluster. I have a friend who is a smart guy, owns 4 restaurants, who got scammed by a fake utility company scam fishing for gift cards. They catch you at a vulnerable moment and are good at pressing buttons.

Even with old people, people don’t realize how many sales and scam calls they get. My mom literally get 30-40 calls a day. Odds are, eventually you’re going to crack.

Imitation is the highest form of flattery, and the cryptocurrency ecosystem is not bereft of imitation.

Most crypto scams involve hyping some token, a form of market manipulation, or other classic financial scams. That's a bulk business based on PR. Running a long con uses a different mindset. It involves conning individuals one at a time. That takes a lot of effort per customer and experience in one on one selling. That's not the usual crypto scammer's MO. This is more like classic long con people pivoting to a new product line.

The thing to look for here is who's behind the fake brokerages. It takes work to crank up a fake brokerage. In the binary option scams, it turned out that one company, SpotOption [1] was providing most of the software and expertise. They offered scam brokerages as a service. That's what needs to be tracked down.

[1] https://en.wikipedia.org/wiki/SpotOption

SpotOption had a production output of $5 Billion in trades in 2015. Damn!

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