Wire Fraud Scam Upgraded with Bitcoin

The FBI has issued a bulletin describing a bitcoin variant of a wire fraud scam:

As the agency describes it, the scammer will contact their victim and somehow convince them that they need to send money, either with promises of love, further riches, or by impersonating an actual institution like a bank or utility company. After the mark is convinced, the scammer will have them get cash (sometimes out of investment or retirement accounts), and head to an ATM that sells cryptocurrencies and supports reading QR codes. Once the victim’s there, they’ll scan a QR code that the scammer sent them, which will tell the machine to send any crypto purchased to the scammer’s address. Just like that, the victim loses their money, and the scammer has successfully exploited them.

[…]

The “upgrade” (as it were) for scammers with the crypto ATM method is two-fold: it can be less friction than sending a wire transfer, and at the end the scammer has cryptocurrency instead of fiat. With wire transfers, you have to fill out a form, and you may give that form to an actual person (who could potentially vibe check you). Using the ATM method, there’s less time to reflect on the fact that you’re about to send money to a stranger. And, if you’re a criminal trying to get your hands on Bitcoin, you won’t have to teach your targets how to buy coins on the internet and transfer them to another wallet—they probably already know how to use an ATM and scan a QR code.

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Posted on November 16, 2021 at 6:18 AM • 15 Comments

Comments

Peter A. • November 16, 2021 7:19 AM

The Bitcoin “ATMs” are basically snake oil vending machines – but without the need to restock them with actual vials of some oily liquid.

Clive Robinson • November 16, 2021 7:40 AM

@ ALL,

describing a bitcoin variant of a wire fraud scam:

Apparantly this is one of the main methods behind the Chinese version that less than delicately translates as “pig butchering” or “piggy butchering” that certain Chinese call this method of taking money from young smart phone users.

Apparently the method can take time to build a relationship, with one big clue it is a scam being the remote party switching a conversation from one safer social media platform to a less safe messaging system, for what might sound plausable reasons but are realy just a way to tighten control.

The thing about crypto-coin and smart contract systems is,

“No matter how you look at these systems, they’ve lots of angles, and they are all crooked”

Ted • November 16, 2021 9:22 AM

This is really startling. I’d never heard of crypto ATMs. What a convenience for scammers.

There is a website that purportedly gives a map of crypto ATM locations.

https://coinatmradar.com/

A few near me are located at gas stations and vape shops – places I do not think of when I think of reputable financial institutions. Red flag city.

Peter A. • November 16, 2021 10:49 AM

@Ted: over here these Bitcoin machines stand next to regular ATMs in rather reputable places, like big malls. I have no idea what the usage patterns of these abominations are, but while passing by I have never seen anyone standing next to them, while regularly seeing people operating the “normal” ATMs. So there’s apparently much less traffic on Bitcoin devices; I wonder what their owners’ profit margins are.

Anyway the Bitcoins ones are a novelty and are on the rise, while stuffed animals grabbers and useless trifles dispensers go downhill. The former definitely have more dupery potential.

Ted • November 16, 2021 1:10 PM

@PeterA: Amazing! I am tempted to go up and just look at one. I’m sure it won’t immediately do anything monster-y, but if anyone uses it while I am there, my eyes are going to be wide, wide open.

At malls, really?! Yes, questions on profit margins and general administration would be fascinating to learn about. I wonder how one gets their fiat currency prepared for transfer to bitcoin?

This was from Investopedia:

Most bitcoin ATMs will set a lower and upper limit on the cash that can be deposited. All bitcoin ATM operators in the United States must register with the Financial Crimes Enforcement Network (FinCEN) and comply with anti-money laundering provisions of the Bank Secrecy Act (BSA).

I wonder if there are similar provisions where you are?

https://www.investopedia.com/terms/b/bitcoin-atm.asp

Ted • November 16, 2021 10:59 PM

I spent some of this afternoon listening to random YouTube videos on BTC ATMs. I think I may have even found the Jeff Bridges (The Big Lebowski actor) version of Warren Buffett (investor).

Some people were talking about how to set up a BTC ATM business. And there is really a whole ecosystem behind this. A BTC ATM in a good area could do around $30,000 of cash-to-bitcoin conversions a month, of which the owner can take a percentage. Someone mentioned that for them it was around 12%.

Can you imagine trying to retrieve that much cold, hard cash from your BTC ATM every month? Seems a little perilous.

The Jeff Bridges version of Warren Buffett also said that it is near impossible to find a bank who wants to have a BTC ATM operator as a client. He was also a little put off on the behavior of some of the operators in the market. One person he knew advertised a low transaction fee (6%) but didn’t make in clear to customers that he was padding the market price of bitcoin.

Also I checked and my investment brokerage doesn’t mess with cryptocurrency. So I probably won’t either even if someone really, really needs my money, and they need it to be in bitcoin.

Clive Robinson • November 17, 2021 12:23 AM

@ Ted, ALL,

Someone mentioned that for them it was around 12%.

One person he knew advertised a low transaction fee (6%) but didn’t make in clear to customers that he was padding the market price of bitcoin.

As I’ve said, further up of these crypto-coin and smart contract systems

No matter how you look at these systems, they’ve lots of angles, and they are all crooked

It’s like playing one of those early “Multi-User Dungeon”(MUD) games that comes up with,

“You are standing infront of a door, behind which is a maze of twisty little passages, uncertain direction, sudden calamity, and repeated death awaits you, as all sorts of horrors beset you at every turn. Are you upto the challenge?”

That is just a breeze compared to “piggy butchering” and worse that goes on in the Crypto-Con world,

That is the public face of crypto-coin schemes, “hype and plunder” as long-con or rolling-con Ponzi schemes.

Ted • November 17, 2021 1:46 AM

@Clive, ALL

Re: Piggy butchering scams

This abs infuriates me. Why call it “pig butchering” when it is really more like “professional con artists linked to Chinese mafia”[1] doing the butchering of vulnerable, young lonelyhearts.

It’s odd that “sha zhu pan” means pig-butchering in Chinese, while “zhu sha pan” is the name of a peony cultivar that produces beautiful red, fragrant anemone-type blooms.

Re: MUD games and “a maze of twisty little passages, uncertain direction…”

Hilarious description, but probably meant to be true and fun! 😆

Also, re: “lots of angles, and they are all crooked” and “hype and plunder

Amazing that such phrases could be so timeless and applicable! They could really protect people and are very much worth repeating!!

[1] https://www.the-sun.com/money/3988608/i-lost-60k-pig-butchering-crypto-dating-site-fraud/amp/

lurker • November 17, 2021 11:35 AM

@Ted Why call it “pig butchering” …
while “zhu sha pan” is the name of a peony

Chinese is a language riddled with puns and double-entendres because there are only about 400 phonemes; multiply by 5 tones in Mandarin, then apply that across a dictionary of 30 – 50,000 “words” or characters. So any attempt at understanding chinese from a romanised version is doomed to confusion.

shazhupan 杀猪盘 lit. kill pig dish

zhusha 朱砂 red sand or cinnabar, the color of your peony

meanwhile: shao 芍 peony

hth

Ted • November 17, 2021 1:09 PM

@lurker: shazhupan 杀猪盘 lit. kill pig dish
zhusha 朱砂 red sand or cinnabar, the color of your peony

That is really beautiful that you know that. Languages are so rich and fascinating. I did a Spanish minor a long, long time ago. But I was very quiet then and never put myself in a place to practice it. So i have so much respect for those here who know more than one language.

It would probably take me years upon years to understand all the subtleties in Chinese.

Peonies are beautiful. My mom has some. They are shades of cotton candy pink. I have no idea how to say that in Chinese though. I would probably accidentally say something much sillier.

lurker • November 17, 2021 5:54 PM

@Ted

Most native anglophones ignore the pinyin tone marks, so when we have a peony called Zhu sha lei, is it the same zhūshā as in Zhu sha pan? Zhu sha lei is a mid pink, but sometimes described as a tree peony, and thus hardly likely to have been bred from Zhu sha pan. The kūnqǔ opera “The Peony Pavilion” refers to the pink tree peony 牡丹 mǔ dan…

The butchering of a pig can be witnessed on feast days in any rural chinese village. An essential item is the 盘 pán, a basin of about 8 litres (~2 US gallons), used first to collect the blood, then for the various treasured internal parts. This collection of porcine “assets” is the metaphor used to describe the stripping of the financial victim.

Ted • November 17, 2021 8:28 PM

@lurker

I am going to double down on what I said before: That is really beautiful that you know that. Languages are so rich and fascinating.

I am just thinking of what you said in my own words: The 盘 pán is the basin to collect the ‘offerings’ of the pig, which can often be seen during feast days in rural Chinese villages.

This seems quite a few shades different than a just translation of ‘pig-butchering.’

And… Zhu sha lei tree peony! I just looked it up, so beautiful! The shade of pink I am seeing is very close to the color of my mom’s peony bushes.

I just used a plant identification app to id my mom’s flowers and they are oddly enough called “Chinese peonies” or Paeonia lactiflora.

I love language. You tell such a wonderful story with it!! Of course, I’m sure we both still feel for the victims of the sha zhu pan, but there is really much more understanding in what you describe. Many, many thanks!

Clive Robinson • November 18, 2021 12:02 AM

@ lurker, Ted,

used first to collect the blood, then for the various treasured internal parts.

That is offal.

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