I just got scammed

Wednesday 06 January 2016

I’ve just been hit by a nasty scam - posting details so that hopefully others can avoid it.

I’ve been in crypto for two years now, and have so far managed to avoid any major hacks, scams or cons. But a couple of weeks back I noticed something that made me think again. It turns out someone has been pulling a very clever, very nasty scam - possibly for months or even years. And for the life of me, I can’t figure out how.

I recently cashed out some BTC to a well-known exchange - I won’t say which here, but it’s one of the foremost in the world, and generally well-regarded. I sold some BTC for a little under $2,000, and withdrew the money to a GBP bank account. The bank, if it’s relevant, is also well-known, and part-owned by British taxpayers (which includes me).

In between withdrawing USD and receiving GBP, a slab of funds went missing. Here are the exact figures:

I withdrew $1975.05 from the exchange. I received £1275.14 into my bank account. At first glance, that looks about right - but it’s not. The exchange rate for that day (courtesy of Google Finance) was 1.4928 USD/GBP. Which means I should have received £1323.05. So where did my £47.91 go?


Be warned: these guys are capable of taking money right out of your bank account

Now, of course, I’d expect the odd fee here and there. The exchange charges a small amount to withdraw, and the bank another (rather larger) fee to move money across borders. Fair enough, I won’t begrudge people their livelihoods. But I’m short almost £50. Somewhere between the exchange and my account, 3.6% of the total has just evaporated.

Looking back at previous withdrawals, it seems this has happened many times before. The scammers are greedy, but not too greedy. They’ve realised the truth of the old saying: You can shear a sheep many times, but only skin it once. They take a chunk, but not so much you’d notice it - unless you were up to date on exchange rates, and you were looking for it.

It’s the kind of amount you could almost explain away by charges and poor conversion rates from USD to GBP (via EUR), a bite here and a bite there. Almost. But not quite: not unless the banks are ripping us off to a simply unimaginable degree and expecting none of us to raise an eyebrow.

So I can’t figure out how they did it, but it’s a smart scam. I just hope no one else gets caught by it.

Update: some helpful folks on Reddit have been offering answers. This article was, of course, a tongue-in-cheek dig at the banks for taking such an extortionate cut in exchange fees. It is a scam - just unfortunately an entirely legal and routine one.

comments powered by Disqus