Of Blockchain, Cryptocurrency and Scams – Manila Bulletin

A few years ago, a friend’s son asked me what I know about bitcoin. “Not much,” I said. “Ah, Tito, I think I can help you,” he said.

He told me about this amazing company that offered him a monthly 40 percent return on investment depending on the initial amount an investor would put in. He said that if I was willing to invest, he would share the profits with me, making it a win-win for both of us. He then talked about trading and cryptocurrency, which, when I googled (while we were talking), came from the website of the company he was telling me about, word for word.

“I smell a scam,” I told him. He got angry and said with a disrespectful smile that the problem with me is that I’m afraid to try new ideas. He said that crypto is the future and those who will not embrace it will be left behind. He arrogantly told me that the company is a reputable loan company that uses blockchain and that he only asked me to invest because he needed people to bring in investors who could recruit more people to invest. I stopped him and said there is a word for that scheme: pyramiding.

Sensing her son’s frustration, the mother told me to trust the boy, invest and give the 16-year-old kid a chance. I said no. It is a clear scam. My friend insisted that it couldn’t go wrong, as the boy was promised more than one percent ROI per day regardless of the current price of Bitcoin in the market.

When I explained to the boy and his mother the dangers of entering into something they do not fully understand, I sensed hostility from both of them. The father told me that among all their friends, only me, “na may lakas ng loob” said that to their son, a technician in the family. My parents eventually stopped talking to me and didn’t even bother to wish me Merry Christmas in 2017.

In January 2018, the company announced that it was being merged. Two US state securities regulators issued cease and desist letters ordering the company to cease and desist from conducting potentially fraudulent operations.

The boy’s $10,000 investment in 2017 was worth around $33 in early 2018.

In November 2018, the boy’s parents wished me “Merry Christmas” via text message.

Fast forward to November 2022, the boy’s parents were duped because they listened to him (again) to invest in crypto mining apps that target users who have yet to learn about trading and investing. They offered two easy-money options: First, no investment as long as you recruit people to join; and second, deposit money and let the company use it for cryptocurrency mining.

When the investment turned out to be a scam, the son informed me of what happened and humbly asked for advice. Here’s what I told him:

1) Don’t believe anyone who promises to double your money in a few days. High yield investments offered on social media are likely scams. Stay away from it.

2) Unsolicited investment offers from social media and emails are also likely scams. Refrain from entertaining unknown callers who will ask you to invest in cryptocurrency.

3) Do not believe in investment offers with limited time frames. This is a trick to get you to make up your mind quickly. The scammers know that many people will make the wrong decision on impulse, so they will pressure you to make a decision immediately.

Blockchain is an amazing technology that can do many things that can be useful in making our lives easier, including eradicating fraud. However, scammers use it to trick users because not many people understand how it works.

You will meet many people talking about cryptocurrency, DeFi, Web3, blockchain and other buzzwords on the internet. They will make promises to you to invest in what they offer. Ask them what problem the solutions they offer can solve. If they have a solution looking for a problem, stay away from it.

Final warning: ‘Tis the season when there are many scammers. These crooks on the internet will do anything to get our hard earned money. They will target our emotions to gain our trust and exploit our greed to steal from us. # Be Fully Informed. Be careful.

(Art Samaniego, Jr. is head of the Manila Bulletin IT department and editor of Technews.)