Bitcoin Trading Scam
There is a never-ending parade of new share and currency trading scams. Bitcoin scams are the latest; they won’t be the last.
Geoffrey Luck tells the story of a friend who was convinced by a tale that (as usual) involved some well-known people and trade names to give the con-men added credibility.
It is easy to mock those caught by these criminals as stupid or greedy. They are not. The scammers are well-organised, slick and professional, and they target the vulnerable, including older people and single parents.
This is part of the story. Go to Quadrant Online to read the rest:
“Quite by accident my friend (let’s call him Arthur) came upon a news website previously unknown to him and saw the headline: “The Biggest Deal in Shark Tank History, That Can Make YOU Rich in Just 7 days! (seriously)” That it carried that day’s date added to the appearance of authenticity.
The story explained that two young graduates from the Queensland University of Technology had developed an automated investment trading platform that would allow an ordinary investor to benefit from the ability to arbitrage between volatile and often rapidly changing bitcoin prices without having to buy the cryptocurrency. They called it ‘Bitcoin Trader’. An algorithm based on data and machine learning would issue ‘buy’ orders when the price fell and ‘sell’ orders when it rose, also taking advantage of short selling opportunities. There was nothing revolutionary about the idea – it appeared to him to be similar to the program trading systems widely used by institutional investors, hedge fund managers or mutual fund managers to execute large volume trades on stock markets. The only new angle was that it was applied to bitcoin trading.
The pitch said to have been put to the Sharks in the TV programme sought an investment of $200,000 for 25% of the company, valuing the business at $800,000. The initial skepticism at the idea of getting rich quickly was dispelled (the story said) when one of the panel, Janine Allis, was induced to try the trading platform on air, there and then. To her amazement, her initial investment of $250 rose to $323.18, a profit of $73.18 – in three minutes!
What then ensued (according to the report) was a frantic bidding war between competing investors. Said Steve Baxter (purportedly): “Bitcoin is so hot right now and if even somebody like Janine, no offence Janine, can make money from it, I’m all in. I need to have a piece of this. I’m going to make a huge offer, $2 million for 25% of the company.”
At this point, Janine was said to have interrupted to observe that her trading account had gone up again – to a profit of $148.42, all in eight minutes. Glen Richards then bid $2.5 million for 25%, upon which Baxter came back with the winning bid of $2.5 million for 20% of the company. This valued it at $12.5 million. The deal was celebrated as the biggest in the history of the Shark Tank.”
Of course, none of this was true… Shades of JBC, Eurosoft, CFS, etc, etc.