AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- Renowned finance educator exposed crypto scams targeting social media users.
- Fake "wealth institutes" and WhatsApp groups used to defraud victims.
- Increasing losses from crypto scams reported globally in 2024.
Australian finance educator Scott Pape, widely recognized as the “Barefoot Investor,” has unveiled alarming practices behind crypto scams exploiting his identity to target unsuspecting users on social media platforms. These scams, often orchestrated via Facebook and WhatsApp, leverage fake wealth training programs to deceive individuals into fraudulent investments.
Pape’s investigation revealed hundreds of counterfeit Facebook groups impersonating his persona to gain credibility among his followers. These groups redirected victims to exclusive WhatsApp groups under the guise of “financial training programs” like the “DB Wealth Institute.” Upon joining, participants encountered fabricated success stories and were encouraged to invest in dubious cryptocurrency schemes.
Pape reported being invited to the WhatsApp group after connecting with a fraudulent Facebook page. The scammers, claiming to represent the DB Wealth Institute, touted a sophisticated AI-powered financial tool and boasted about training thousands of students globally. Despite their professional façade, investigations revealed warnings from multiple financial regulators about fake “wealth institutes” using similar strategies to defraud participants.
Within the WhatsApp group, Pape observed an influx of messages showcasing supposed crypto trading successes. Participants were urged to follow trading signals provided by a "professor" daily. These signals, often generating minor profits initially, created an illusion of legitimacy. Pape noted that many of these success stories were likely generated by bots to amplify trust.
The scam’s structure unfolded in three stages: building confidence, exploiting greed, and inducing fear. After securing initial trust, the scammers aggressively pushed victims to increase their investments. Pape described receiving hundreds of messages from an assistant named Ally, who encouraged him to take out loans to join exclusive investment programs requiring substantial deposits ranging from thousands to millions of dollars.
Pape highlighted a pivotal moment when the scammers pressed for more funds, revealing the predictable pattern of such schemes. He emphasized that these scams often escalate losses by preying on victims’ desperation to recover their money.
The rise of such scams aligns with broader trends in the crypto industry. A report by blockchain analytics firm Chainalysis revealed that $2.2 billion was lost to crypto scams in 2024, a marked increase from $1.8 billion in 2023. These findings underscore the critical need for vigilance as fraudulent actors target financial markets globally, including notable firms like (ASX:XRO).
Scott Pape’s efforts highlight the importance of awareness in combating these pervasive scams, offering a timely reminder of the risks in the evolving crypto landscape.
