"A successful marketing campaign, promoted by multiple KOLs, can easily earn about $69 million." — Mr. X, cryptocurrency scam operator

Compiled & Edited by: Deep Tide 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

Shadows of Dubai: Confessions of a Scam Operator

In a luxurious villa on Palm Island, Dubai, a mysterious figure was interviewed. The villa rents for up to $15,000 a week, and sunlight streamed through the floor-to-ceiling windows, illuminating the $250,000 worth of jewelry he wore, sparkling brilliantly. He casually remarked, "This is a legitimate way to steal." There was a hint of unsettling pride in his tone. This self-proclaimed "Mr. X," a cryptocurrency scam operator, calmly described how he could design a scam that could defraud tens of millions of dollars in just 15 minutes, as if discussing something utterly mundane.

Through this exclusive interview, National Geographic's "Trafficked" host Mariana Van Zeller reveals a little-known side of the crypto world — the scam tactics that defraud ordinary investors of billions of dollars each year. From the scam designers to the financially ruined victims, and to the FBI agents dedicated to combating such crimes, this episode provides a panoramic view of the harsh realities behind an almost unregulated digital wealth era.

Highlights from the Interview

Mr. X (Scam Operator)

• "This is a legitimate way to steal. This is a legal way to make money."

• "A successful marketing campaign, promoted by multiple KOLs, can easily earn about $69 million."

• "In Dubai, we know privileged people who can help us get out of trouble. There are no lawsuits here; we can escape many things."

• "That's because they are 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 without even doing a 5-minute Google search, I think they are the dumbest people on Earth."

• "How would we get caught? Who would catch us? The crypto police? No one will help those investors."

Robert (Victim turned vigilante in crypto)

• "When the dust settled, I was left with $86. It's hard to describe that feeling; emotionally, it was devastating."

• "We may have saved thousands of people from losing millions of dollars. But it hasn't been easy; we've even received death threats."

• "We monitor newly released tokens for signs of suspicious activity. For example, when you see a token drop 85% in 24 hours but only 3% in the last hour, it usually indicates someone is dumping a lot."

• "A legitimate project will do everything to prove to investors that their funds are safe, rather than avoiding questions."

• "When a project's developer becomes defensive when questioned or directly removes the questioner from the chat room, it's almost certainly a sign of a scam."

Xavier (Cryptocurrency enthusiast)

• "It's shocking how many people can do this and still get away with it. I personally know some who lost their life savings because of it."

• "I've been scammed 7 to 8 times myself; I first invested $500, then lost nearly $10,000 the next time."

• "People don't like to read, don't like to research; they just blindly follow trends and influencers on social media."

• "There are no rules or protections in the decentralized finance world. Once you're scammed, you can only blame yourself; there's no way to recover your funds."

FBI Representative

• "We do hear a lot about the gray areas and undefined regions of cryptocurrency, saying it's not money, so currency rules don't apply. But when individuals invest under a specific promise that isn't fulfilled, that's fraud. Fraud is fraud."

• "We often find that new technologies are first adopted by predatory individuals. In the past year, we've seen an exponential increase in fraud related to cryptocurrency."

• "People often say the FBI always catches its targets, whether today or tomorrow. Those seeking to harm our system should always be on guard because we are watching."

The Basics of "Rug Pull" Scams

Mariana: Can you explain how a "Rug Pull" scam works?

Xavier (Cryptocurrency enthusiast, the person who initially explains the scam to host Mariana in the show):

Let me explain how this scam works using a margarita. When we launch a token, let's say it's a scam token, the scammer has bought a large amount of this token at a very low price. As people start buying and the price rises, the token's liquidity and value also increase. At this point, more investors will flood in, and promoters on social media will keep pushing the product.

Ordinary novice investors see this and think, "I need to get in right away; it looks great, it's constantly rising, and everyone is buying." Just when the token's hype reaches its peak, the scammer will "Rug Pull" — sell off all holdings and let the price crash. That's the "Rug Pull" scam.

It's shocking how many people can do this and get away with it. I personally know some who lost their life savings because of it.

Mariana: How important is it for ordinary investors to understand this scam?

Xavier:

Extremely important. I've been scammed 7 to 8 times myself; I first invested $500, then lost 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 trends and invest based on KOLs on social media. However, there are no rules or protections in the decentralized finance world. Once you're scammed, you can only blame yourself; there's no way to recover your funds.

Insider Insights: A Conversation with Mr. X

Mariana: Were you ever a victim yourself?

Mr. X:

Yes, every cryptocurrency trader has experienced a "Rug Pull." So I thought, since this happens, I might as well figure out how they do it and 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 earn from one scam?

Mr. X:

A successful marketing campaign, promoted by multiple influencers, can easily earn about $69 million.

Mariana: Don't you think this is stealing?

Mr. X:

No, this is a way of "legal stealing." This is a legal way to make money.

Mariana: If this is legal, why do you wear masks? Why not do this openly?

Mr. X:

That's 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 recognized, it would end our lifestyle.

Mariana: What is your lifestyle like?

Mr. X:

Luxurious. We rent six villas in Dubai, each costing $15,000 a week. Our team travels together with 20 people. The jewelry I wear daily is worth over $250,000. We drive luxury cars worth hundreds of thousands and live in the most expensive area of Palm Island. Here (in Dubai), we know privileged people who can help us get out of trouble. There are no lawsuits here; we can escape many things.

Mariana: Do you feel guilty about those who have lost everything? We've heard that some have committed suicide because of such scams.

Mr. X:

That's because they are 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 without even doing a 5-minute Google search, I think they are the dumbest people on Earth.

Mariana: Aren't you worried about getting caught?

Mr. X:

How would we get caught? Who would catch us? The crypto police? No one will help those investors.

We don't worry about the law catching up; it's simply not possible. It's almost impossible to detect where we are or to track us.

Mariana: Where do you spend the money?

Mr. X:

Investments, bank accounts, family accounts, legitimate businesses, shoes, clothes, designer brands, jewelry. I feel great; it's a feeling of freedom.

The Story of a Victim Turned Vigilante

Robert (Victim of cryptocurrency scams turned vigilante):

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, take a look at cryptocurrency." I started researching and invested some money, getting decent returns.

One day, I participated in a token launch. It had been postponed several times, and the developers were young and not fully transparent about their identities. On the day of the launch, the developers sold off all their holdings, which looked like a massive "Rug Pull." When the dust settled, I was left with $86. It's hard to describe that feeling; emotionally, it was devastating. Knowing that others were going through the same situation, I decided I had to take action, and it had to start with me.

Now we offer bounties to encourage people to report suspicious activities. In the last 30 days, we have paid out about $17,500 in bounties. This money comes from our own tokens, funding our mission.

We may have saved thousands of people from losing millions of dollars. But it hasn't been easy; we've even received death threats.

Mariana: How do you discover scams?

Robert:

We monitor newly released tokens for signs of suspicious activity. For example, when you see a token drop 85% in 24 hours but only 3% in the last hour, it usually indicates someone is dumping a lot. We enter their online discussions and "AMA" events to ask direct questions.

When a project's developers become defensive when questioned or directly remove the questioner from the chat room, it's almost certainly a sign of a scam. A legitimate project will do everything to prove to investors that their funds are safe, rather than avoiding questions. We once received a request from an investor who had invested in a project we confirmed was a scam, and we helped him avoid greater losses.

Law Enforcement Perspective

FBI Representative:

The FBI has seen many cryptocurrency scams. We do hear a lot about the gray areas and undefined regions of cryptocurrency, saying it's not money, so currency rules don't apply. But when individuals invest under a specific promise that isn't fulfilled, that's fraud. Fraud is fraud.

We often find that new technologies are first adopted by predatory individuals. In the past year, we've seen an exponential increase in fraud related to cryptocurrency.

Fraudsters involved in "Rug Pull" scams must have internal justifications for their actions. They might think victims should be more cautious or believe that the technology works this way, and it's the victims' problem for not understanding.

The same argument could be made: "Because I can enter your house, I can rob you." They are trying to defraud others of their hard-earned money. We will ensure these actors face legal consequences.

FBI Representative:

People often say the FBI always catches its targets, whether today or tomorrow. Therefore, those seeking to harm our system should always be on guard because we are watching.

Future Trends and Warnings

Mariana:

By mid-2022, cryptocurrency had lost over $2 trillion from the previous year's peak, a period referred to as the "crypto winter." Predictably, investors became cautious, making "Rug Pull" scams harder to execute.

However, as the market cyclically recovers, scammers are likely to return. As Mr. X said, people are still investing in new tokens, and scammers will continue to steal their money, continue to defraud, and continue to squander this ill-gotten wealth 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 cryptocurrency scams lies in the promise of quick wealth, attracting investors who do not 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 spreading fraudulent projects, including Kim Kardashian, who was fined nearly $1.3 million for failing to disclose promotional payments.

• Scammers are often tech-savvy young individuals who are oblivious to the moral implications of their actions.

• The "Wild West" nature of decentralized finance makes tracking and regulating scams particularly difficult.

• Even during market downturns, scammers can still find victims, proving the enduring human greed and desire for quick riches.

Regardless of how the cryptocurrency market evolves, one clear fact remains: without a proper understanding and cautious investment, investors will continue to face significant risks. As the program repeatedly emphasizes: "Do your research" and "Don't invest what you can't lose."

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