Scammers Score $3 Million from the WallStreetBets Crowd With Fictional Crypto Launch

Scammers Score $3 Million from the WallStreetBets Crowd With Fictional Crypto Launch
Screenshot: WallStreetBets

A cryptocurrency scam recently pilfered at least $US2 ($3) million from WallStreetBets enthusiasts, convincing them that they were buying into a new crypto coin connected to the popular memestock, according to a report from Bloomberg News.

For weeks, moderators of the notorious Reddit forum have warned users to avoid fraudulent scams based around the good WSB name. A post, tethered to the top of the group’s page, asks community members to be wary of offers related to WSB products:

ANY INVESTMEMT [sic] WITH THE WSB NAME IS UNRELATED TO WSB…

People keep posting a press release about an “official” WallStreetBets distributed app. (Aka, a crypto pyramid scheme)

Nothing could be further from the truth. We are strongly anti-monetisation. This scam has nothing to do with us.

Apparently, a lot of people missed this memo, because a bunch of WSB fans reported fell for a scam of this ilk. Indeed, an offer recently began circulating on chat app Telegram, peddled by an account called “WallStreetBets – Crypto Pumps.” This “Crypto Pumps” said it was offering a chance for bets enthusiasts to cash in on a new WSB crypto-token, dubbed “WSB Finance,” before it officially launched. In the crypto world, an arrangement like this is called a “premine sale” — an opportunity for early investors to buy up a token before it hits the crypto exchanges and gets a more widespread, public release.

Interested parties were instructed to send Binance Coin or Ether to a crypto wallet, then get in touch with the page’s “token bot,” which would send the user WSB Finance tokens. What a good deal! It wasn’t long before the ETH and BNB were pouring in, swelling Crypto Pump’s wallet.

However, buyers ran into a little snag. Not long after the coinage was pocketed, “Pumps” told them that there had been a problem with the bot — it was malfunctioning. As a result, users should send more crypto payments, or they would “lose their initial investment,” Bloomberg reports.

Of course, there is no such thing as “WSB Finance tokens” and, therefore, the coins never showed up. The fraudsters, whoever they were, made off with some 3,451 Binance coins — a sum which, when translated into real-world money, amounts to a windfall of some $US2.1 million ($3 million). The criminals may have also made some unknown amount via Ether donations, too.

Before the “Crypto Pumps” profile disappeared from Telegram, the page’s administrator apparently had one final message to share. The fraudster wanted victims to know how the ill-gotten winnings would be spent: “Buying lambo now,” they said.