Compiled by Carine W.

"A successful marketing campaign, promoted through multiple KOLs, can easily make about $69 million."

—— Mr. X, Cryptocurrency Scam Operator

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

The Shadow of Dubai: Confessions of a Scam Operator

In a luxurious villa on Dubai's Palm Island, a mysterious figure gave an interview. The villa, renting for $15,000 a week, had sunlight streaming through floor-to-ceiling windows, reflecting off the $250,000 worth of jewelry he wore. "This is a legal way of stealing," he said casually, with an unsettling hint of pride. This self-proclaimed "Mr. X," a cryptocurrency scam operator, calmly described how he could design a scam capable of stealing tens of millions of dollars in just 15 minutes, as if discussing something completely ordinary.

Through this exclusive interview, National Geographic's "Trafficked" host Mariana Van Zeller reveals a little-known side of the crypto world—the operational methods of scams that defraud ordinary investors of billions of dollars annually. This episode comprehensively presents the harsh reality behind a largely unregulated digital wealth era, from scam designers to victims who lost everything, to FBI agents dedicated to fighting such crimes.

Key Interview Highlights

Mr. X (Scam Operator)

• "This is a legal way of stealing. This is a legal way of making money."

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

• "In Dubai, we know privileged people who can help us get out of trouble. There are no lawsuits here, we can get away with a lot of things."

• "That's because they're weak-minded. Don't invest what you can't lose, you 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're the stupidest people on Earth."

• "How would we get caught? Who's going to catch us? The crypto police? Nobody's going to help those investors."

Robert (Crypto Enthusiast Turned Volunteer Watchdog)

• "When the dust settled, I had only $86 left. It's hard to describe. Emotionally, it's devastating."

• "We've probably saved thousands of people millions of dollars. But it hasn't been easy, we've even received death threats."

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

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

• "When a project's developers become defensive when questioned, or directly remove questioners from the chat room, it's almost certainly a sign of a scam."

Xavier (Cryptocurrency Enthusiast)

• "It's amazing that so many people can do this and get away with it. I personally know people who have lost their life savings because of this."

• "I've been scammed myself seven or eight times, the first time I invested $500, and the next time I lost almost $10,000."

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

• "In the world of decentralized finance, there are no rules, no protections. When you get scammed, you can only blame yourself, there's absolutely no way to recover your funds."

FBI Representative

• "We do hear a lot about cryptocurrency having many gray areas and undefined regions, about how this isn't money, so money rules shouldn't apply. But when individuals invest under the understanding of particular promises that aren't delivered, that is fraud. Fraud is fraud."

• "We often find that new technology is first adopted by predatory individuals. In the past year, we've seen exponential growth in cryptocurrency-related fraud."

• "People often say the FBI always gets their man, whether it's today or tomorrow. Those looking to harm our systems should always be vigilant, because we are watching."

The Basic Principles of a "Rug Pull" Scam

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

Xavier (Cryptocurrency enthusiast who initially explained the scam to host Mariana):

Let me explain this scam using a margarita. When we launch a token, let's say it's a scam token, the scammers have already purchased 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 increase accordingly. This attracts more investors, while promoters on social media continue to promote the product.

The average novice investor seeing this thinks: "I need to join immediately, it looks great, constantly rising, everyone's buying." And just when the token's hype reaches its peak, the scammers "Rug Pull"—they sell all their holdings and crash the price. That's a "Rug Pull" scam.

It's amazing that so many people can do this and get away with it. I personally know people who have lost their life savings because of this.

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

Xavier:

Extremely important. I've been scammed myself seven or eight times, the first time I invested $500, and the next time I lost almost $10,000. That's the problem—people don't like to read, don't like to research, they just blindly follow influencers on social media. However, in the world of decentralized finance, there are no rules, no protections. When you get scammed, you can only blame yourself, there's absolutely no way to recover your funds.

Insider Revelation: 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 is happening, I might as well figure out how they're doing it, how to make money like them.

Mariana: Why did you become interested in this?

Mr. X:

Because it's easy money. It's Easy Money.

Mariana: How much can you make from one scam?

Mr. X:

A successful marketing campaign, promoted through multiple influential people, can easily make about $69 million.

Mariana: Don't you think this is stealing?

Mr. X:

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

Mariana: If it's legal, why do you wear masks? Why not do this openly?

Mr. X:

It's because my face is recognizable to many people. This is my promoter (Shiller), he has hundreds of thousands of followers and connections with celebrities. If we're recognized, it would end our lifestyle.

Mariana: What is your lifestyle like?

Mr. X:

Luxurious. We've rented six villas in Dubai, each costing $15,000 a week. Our team has 20 people traveling together. The jewelry I typically wear is worth over $250,000. We drive luxury cars worth hundreds of thousands of dollars 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 get away with a lot of things.

Mariana: Do you feel guilty about those who have lost everything? We've heard of people committing suicide because of scams like these.

Mr. X:

That's because they're weak-minded. Don't invest what you can't lose, understand? Who would do that?

If you're going to put your life savings into a token without even bothering to do a 5-minute Google search, I think they're the stupidest group of people on Earth.

Mariana: Aren't you afraid of getting caught?

Mr. X:

How would we get caught? Who's going to catch us? The crypto police? Nobody's going to help those investors.

We're not worried about the law catching up, it's simply impossible. It's almost impossible to detect where we are or track us.

Mariana: What do you spend your money on?

Mr. X:

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

The Story of a Victim Turned Vigilante

Robert (Cryptocurrency scam victim turned vigilante):

A few years ago, I got cancer, which gave me more time to slow down and focus on life, including investments. One day, my son came to me and said: "Hey, Dad, check out cryptocurrency." I started researching and invested some money, getting decent returns.

One day, I participated in a token launch. It had been delayed several times, and the developers were young and not fully identified. On the launch day, the developers sold all of their holdings, looking like a massive "Rug Pull." When the dust settled, I had only $86 left. It's hard to describe. Emotionally, it's devastating. Knowing that others were experiencing this too, I decided something had to be done, and it had to start with me.

Now we offer bounties to encourage people to report suspicious activities. In the last 30 days, we've paid about $17,500 in bounties. This money comes from our own token, used to fund our mission.

We've probably saved thousands of people millions of dollars. But it hasn't been easy, we've even received death threats.

Mariana: How do you identify scams?

Robert:

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

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

Law Enforcement Perspective

FBI Representative:

The FBI has seen many cryptocurrency scams. We do hear a lot about cryptocurrency having many gray areas and undefined regions, about how this isn't money, so money rules shouldn't apply. But when individuals invest under the understanding of particular promises that aren't delivered, that is fraud. Fraud is fraud.

We often find that new technology is first adopted by predatory individuals. In the past year, we've seen exponential growth in cryptocurrency-related fraud.

Fraudsters involved in "Rug Pull" scams must have internal justifications for their actions. Perhaps they believe victims should be more cautious, or that this is just how the technology works, and it's the victims' problem if they don't understand.

The same argument would say: "Because I can get into your house, I can rob you." They are criminal enterprises trying to take other people's hard-earned money. We will ensure these actors face legal consequences.

FBI Representative:

People often say the FBI always gets their man, whether it's today or tomorrow. Therefore, those looking to harm our systems should always be vigilant, because we are watching.

Future Trends and Warnings

Mariana:

By mid-2022, cryptocurrency had lost more than $2 trillion from its highs the previous year, a period known 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. Scammers will continue to steal their money, continue to defraud, continue to squander these ill-gotten gains on gold and diamonds.

Xavier's advice:

Before investing in anything, you need to do thorough research.

Mr. X's "advice":

Don't invest in what you can't lose.

Key Insights

• The allure of cryptocurrency scams lies in the promise of quick riches, attracting investors who don't understand the complexities of this 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 promotions play a key role in spreading fraudulent projects, including celebrities like Kim Kardashian being fined nearly $1.3 million for not disclosing promotional fees

• Scammers are typically tech-savvy young people who turn a blind eye to the moral implications of their actions

• The "Wild West" nature of decentralized finance makes scams particularly difficult to track and regulate

• Even in market downturns, scammers still find victims, proving the persistent human greed and desire for instant wealth

Regardless of how the cryptocurrency market develops, one clear fact remains: Without adequate understanding and cautious investment, investors will continue to face significant risks. As repeatedly emphasized in the program: "Do your research" and "Don't invest what you can't lose."