How-to Detect a Scam II

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How-to Detect a Scam II

In the first part of this article we analyzed the website of Sweden Coin. In this part I’ll continue the story and tell you about what happened after I registered. I will also provide some details from my acquaintances acquaintance to share details of what happens once you actually send money to kryptonexlabs.

Red Flags Phone Call

2 minutes after filling in the registration form I got a phone call from a friendly lady. This is a very big red flag. I have never ever received any personalized phone calls, chat messages or e-mails when wanting to buy cryptocurrencies or invest in an ICO (sometimes e-mails after explicitly contacting support).

The number was a Swiss number which belongs to a call center according to search.ch. This is definitely another hint that something is off. A serious company – if they would really call you which I doubt – would call from their office phone.

Here is a rough transcript of the conversation. The conversation was held in German and I am loosely translating everything to English. I’m providing some screenshots of what I was seeing online while on the phone. Please note that the website has changed a bit in the meantime. I will use the original screenshots from when I made the call beginning of March 2018. I will also mark everything in bold that is clearly bogus information and explain below why that is the case.

(BTW: For obvious reasons I pretended to not be knowledgeable about cryptocurrencies. I also tried to get her to talk as much as possible.)

Lady: I have seen you registration here on krytonexlabs. Do you already have any experience with cryptocurrencies.

Cryptohelp.ch: No I do not have any experience.

Lady: You sound really young, how old are you?

Cryptohelp.ch: 31

Lady: If we are talking about cryptocurrenies you are aware of the immense potential. Bitcoin, Ethereum, Ripple and so on… You have certainly heard of E-Krona from Sweden? This information is not yet out. If we’re talking about investments it is not good to simply buy cryptocurrencies since they are unsafe and volatile. We are a company that allows you to trade with cryptocurrencies. That is much more secure and smarter. I will now send you an e-mail with a link to our platform.

This is the first e-mail I got from Zara.

She now tells me to read the email and to log into the website.

Lady: This is our platform. Maybe it looks a bit complicated right now. You will talk to one of our market analysts soon and will get all information. In 2-3 days you will have no more problems with using the platform.

Cryptohelp.ch: ok

This is what the website looked like after logging in.

Lady: Maybe you are a student?

Cryptohelp.ch: No I’m a stay-at-home mum.

Lady: Ah perfect, then you can of course use the platform to gain extra income or you leave your money on the platform and then in a few months you can buy yourself something nice.

Cryptohelp.ch: Sounds good.

Lady: We work in the following manner. If you earn any money we will take 1-2% of your winnings. So if you win then we also win. Do you see on the top right of the website? You should click on Margin Trader and then on Crypto.

Cryptohelp.ch: Yes, one moment.

Lady: What do you see?

This is what the Crypto Margin Trading page looks like. There were a couple more of the popular cryptocurrencies available.

Cryptohelp.ch: Some cryptocurrencies.

Lady: These are the largest cryptocurrencies that are currently available on the market. Approximately 2 weeks ago Bitcoin was at 6k, now it is at 11k. Our clients have made incredible profits. One has to seize this chance. Now click on Invest.

Cryptohelp.ch: Yes, done.

Lady: I will now explain why trading is more profitable than investing. Imagine I am the market analyst. I tell you that the market analyst will tell you to invest. Please click on Invest on Bitoin to USD and set a Stop Loss. This is important. You can never loose more than the Stop Loss value. The deal is automatic and you have a maximum of 5 Euro loss. Everything is in your control and your hands. The market analysts will explain everything in much more details. You will receive a call from them. Do you have any questions?

Cryptohelp.ch: How can I buy the Sweden Coin?

Lady: I have already told you that you cannot buy the coin currently. The government has not yet allowed the E-Krona and it is not yet 100% regulated. When it is out you will be able to buy it on our platform. You can also trade commodities, Euro and so on on our platform. 100 different options. The market analysts will help you with this.

Cryptohelp.ch: Sounds good.

Lady: After you have done your investment you will get a call from our market analyst and an email detailing which documents you need to send. Passport and so on since we don’t want to launder money.

Cryptohelp.ch: How can I transfer money?

Lady: Do you use Visa or Mastercard?

Cryptohelp.ch: No I don’t use credit cards.

Lady: With credit card you can pay directly online. Do you have online banking?

Cryptohelp.ch: yes

Lady: I can send you our bank number to your E-Mail, but then it’s a minimum of 500 Euro. After you have done the transaction you can send me a receipt of the bankwire per e-mail. It will probably take 2 days until it’s on your account. Then you can start trading. We can also do this together.

The first e-mail I got with details for the wire transfer.

Cryptohelp.ch: Ah perfect.

Lady: Please be careful, enter the bank number carefully and send me the e-mail. In which country are you?

Cryptohelp.ch: Switzerland

Lady: This branch of our company is in Switzerland, but we also have branches in Belgium and Germany. I am sorry for my German, it is not my native language.

Cryptohelp.ch: So then I cannot transfer Swiss Francs? (Note: Currency of Switzerland)

Lady: Just a moment, please stay on the line.

Some music.

Lady: Yes of course you can do this, 500 CHF. Just a moment I need to check something. You can do Euro or USD…

Some more music.

Lady: Are you still here? So  when you do a wire transfer from your online banking you will have the option to select the currency you want. You can choose Euro.

Cryptohelp.ch: Which is cheaper? Euro or USD?

Lady: Dollar are cheaper.

Cryptohelp.ch: I’m talking about the bank fees.

Lady: No you don’t have any bank fees. You can choose Euro or USD. But the value of the dollar is the same as CHF. So you want to select USD?

Cryptohelp.ch: Yes

Lady: I will now send you a different bank account where you can send USD. Alright we’ll hear from each other again in 2 days when the money has arrived. If you don’t understand something or need help please contact me via e-mail.

The second e-mail I got with wire transfer details.

And that was the entire phone call.

Phone Call Analysis

We will now go over a few of the things that Zara said in that phone call.

If we are talking about cryptocurrenies you are aware of the immense potential. Bitcoin, Ethereum, Ripple and so on… You have certainly heard of E-Krona from Sweden? This information is not yet out. If we’re talking about investments it is not good to simply buy cryptocurrencies since they are unsafe and volatile. We are a company that allows you to trade with cryptocurrencies. That is much more secure and smarter. I will now send you an e-mail with a link to our platform.

So already in the first few sentences the supposedly secret name of Sweden’s cryptocurrency is revealed. She then goes on to try to tell me how trading cryptocurrencies is a much securer and smarter investment than simply buying cryptocurrencies. She does have a point in that cryptocurrencies are not a safe investment and they definitely are to be considered volatile. But why on earth trading this so unsafe and volatile investment would make it any smarter is anyones guess.

Approximately 2 weeks ago Bitcoin was at 6k, now it is at 11k. Our clients have made incredible profits.

It is actually true that Bitcoin was down at 6k, but it wasn’t 2 weeks ago from our phone call, it was more like a month to be exact. But well, let’s not be too exact on this, she was right in that Bitcoin went from 6k to 11k within 2 weeks. However as we all know by now their clients definitely weren’t the ones to profit from this as they all got scammed.

I will now explain why trading is more profitable than investing. Imagine I am the market analyst. I tell you that the market analyst will tell you to invest. Please click on Invest on Bitoin to USD and set a Stop Loss. This is important. You can never loose more than the Stop Loss value. The deal is automatic and you have a maximum of 5 Euro loss. Everything is in your control and your hands.

I am no trading expert, but the statement just seemed fishy to me. So a quick search for how a stop loss actually works will make you realize that you can definitely loose more money. A stop loss means that your sell orders will be triggered once the value of the asset falls below your stop loss value. But if the market is quickly crashing your sell order might trigger much lower than what you set in your stop loss. And especially with the so volatile cryptocurrencies this might well happen.

The government has not yet allowed the E-Krona and it is not yet 100% regulated.

I am not sure what she actually meant by that statement, no cryptocurreny is 100% regulated and it will most likely be a long time before they ever will be.

Passport and so on since we don’t want to launder money.

I had to work hard on not laughing out loud… It is so nice that they don’t want to accept money from crooks.

No you don’t have any bank fees. You can choose Euro or USD. But the value of the dollar is the same as CHF. So you want to select USD?

So that whole discussion regarding the wire transfer is just absurd. She has absolutely no idea about how wire transfers work and what they cost. Of course it does cost you significant bank fees to wire USD internationally from Switzerland to Hungary. It would be significantly cheaper, roughly 0.30 CHF if I’m not mistaken, to wire EUR with a SEPA transfer.

After the Phone Call

I never actually transferred the money to them.

After two days I started receiving calls nearly every few hours. At some point I picked up the phone and had another short chat with the lady. She asked why I hadn’t transferred the money yet. I said that my husband wasn’t very enthusiastic about the idea of buying Sweden coin. She then went on to tell me how nice it would be if I would just do this on my own without consulting my husband and then suddenly a few months later I would be able to tell him that I had made a really large amount of money. At this point I started to lose my patience with her and told her that she should stop ripping off people. She kept up her front and told me that I should be polite with her and that they are a serious company that are taking their users investments seriously.

From my acquaintances acquaintance (I know it sounds weird, but this is the actual connection) I know that once you transfer money it simply never appears in your trading account on the website. It just vanishes somewhere. He has actually contacted the authorities and filed a complaint with the credit card provider. So we’ll see how this whole story turns out.

Further Investigation

I further investigated the website safemarkets. I’m not sure where they get their live data from for the cryptocurrency prices. I had assumed that they were simply querying some API for the data but couldn’t see which one. And unfortunately I cannot get back into the trading site now without registering more information. At the time I compared the prices to coinmarketcap and they were a bit lower. If anyone can figure out where they get their data from write me a comment.

Apparently they didn’t get their prices from coinmarketcap.

Simply going to the website and not the traderoom will show a website like this:

It does look quite legitimate and has a ton of legal stuff plus descriptions of products and so on. If you start to look closer at the Legal things (which of course no-one ever does) you will notice some quite odd things. I will only look at the Withdrawal of Funds document. Apart from the whole document being a bit weird I noted in red the parts I found particularly suspicious.

Investigating the Footer

The Footer just seemed a bit odd to me, so I Googled a bit more.

It’s already weird that the company is so new and doesn’t have a real address. Then I googled the name of the director and it seems it’s the name of a famous Serbian soccer player.

 

I also had the idea to check who registered the domains kryptonexlabs.com, kryptonexlabsapps.com and safemarkets.com but didn’t have any luck.

It might be a perfectly reasonable thing to use WhoisGuard to protect yourself from spammers as a domain owner, but still all together it just points to something illegal going on.

At this point I have stopped my investigation. There are many more avenues that I could have explored such as actually look at the code of the website to potentially see where data came from, investigating the companies further,… However my main goal wasn’t to specifically dig deep into this scam, but to show readers what to look out for in general. This is definitely not the only cryptocurrency scam on the internet. Do not get discouraged by such scams. If you would like to invest in cryptocurrencies, you are willing to invest some time and you follow certain safety rules you will do fine and not get scammed.

Warning Sign Summary

  1. Personal phone call (or chat messages)
  2. Phone call comes from a call center or other strange place.
  3. Bogus financial information.
  4. Lots of companies that don’t really seem to exist.
  5. Strange legal texts that seem to have loopholes.
  6. Using names of famous people.
  7. Not having the domain registered in the company’s name.
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10 comments

  • Rayan says:

    Hi, I was about filling my bank card details and something just came into me and said that i should do some google research first. Then i stumble on your post. Thank God. I think i now just have to hurrily change my google password. They are fucking scammers indeed.

    My only problem now is that they will start disturbing me with their useless phone calls.

    Thanks again for the posting.

    • Sara Sara says:

      I’m glad the site was helpful for you.
      Yes they sometimes still call me to try to convince me to invest (I never actually invested) :/. I keep blocking all numbers they call from.

  • Sithembiso says:

    Hey Sara, I have made 3 deposits with them so far 4000 usd in total.
    Although I have made a withdrawal for 800 usd which was my profit for the first month of trading this article got me very worried. I too signed up with the desire to buy the E-krona however after i realized it’s not possible i still decided to give the platform a chance and to be honest the way things are going I was very satisfied. Do you think they will continue to provide good services or should I pull out immediately ?

    • Sara Sara says:

      Well, since it’s clearly a scam I highly doubt you will get your money back even if you try to pull out. The countless comments of the other reasons just confirm my initial evaluation. Best Sara

  • Jess says:

    Oh no! I have deposited money already. I also perform the withdrawal request but now not sure what will happen. The lady, Matilda Swift, now is asking for more money for me to invest. Any authorities to report this kind of issue?

    • Sara Sara says:

      Hi Jess. Oh no I’m sorry you were scammed. Definitely do not pay any more monet no matter what they tell you! Regarding authorities I think it depends on the country you live in. Definitely contact your bank. If you paid with credit card you might be able to fill in a form saying you got scammed and there is a small chance you might get some money back. I have contacted Swiss authorities, but I assume they get a lot of emails each day. Also I think the scammers are based in the UK. Best protection for the future is to follow the tips I provided and always Google anything sort of suspicious. Best Sara

    • Richard says:

      Hello, Sara!
      I must admit that I was such a fool to believe the article that boasted how great the opportunity is to buy the “Sweden crypto coin”.
      Anyway, I actually tried and entered my name and email address, later on, I even entered my visa card number and security code to deposit 250 eeuros. However, the site told me that there is a problem with the process, and I couldn’t deposit the 250 euros.
      Now, even though I didn’t lose my 250 euros, I am really worried that the details of my visa card are hacked, and any possible damage could happen in the future.
      What should I do? Or at this point, I am safe with my bank account, and I just have to be more attentive next time.
      Thanks a lot for the replying!
      I will you a good day!

      • Sara Sara says:

        Hi Richard
        Don’t feel like a fool. It’s quite an elaborate scam. Next time you’ll know what to look out for :).
        I would suggest you contact your credit card provider and they will be able to advise you best. I would advise to lock the card and get a new one just to be on the safe side, but maybe the credit card provider won’t think it’s necessary.
        Best Sara

  • Richard says:

    Hallo Sara,
    besten Dank für die hilfreiche und ausführliche Recherche !

    Auch einige andere machen bewusst oder auch unbedarft Werbung
    für die kryptonexlabs-Falle:

    https://steemit.com/deutsch/@chrisschoeniger/krypto-wird-die-welt-erobern

    http://www.dailynews.lk/2018/03/17/features/145758/sweden-establishes-cryptocurrency-their-official-coin

    Hilfreich wäre zu erwähnen, das kryptonexlabs.com auf dem Badsite-Index von badbitcoin.org steht. Siehe:

    http://www.badbitcoin.org/thebadlist/index.htm

    Liebe Grüße nach Zürich,
    Richard

    • Sara Sara says:

      Hi Richard
      Puuuh schade, dass noch mehr News aufgetaucht sind…
      Super Referenz mit badbitcoin.org!
      Liebe Grüsse
      Sara

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