Why Do Crypto Scammers Let You Withdraw Money?

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The question of why crypto scammers sometimes allow victims to make withdrawals crops up time and time again, so I thought I’d address it in this article.

Crypto scams range from the outrageously simple to the incredibly complex and involved, and there is no shortage of unsuspecting investors being duped by them.

However, the one thing that’s crucial to the viability of a scam is the ability of the scammers to build trust with the victims in order to extract as much money as possible from them.

They do this using a number of different methods, including fake websites designed to look like investment platforms, fake profiles on social media and dating websites and spurious groups designed to look like real investing communities.

Fake profiles and official titles

Scammers will employ various methods to con victims, such as using fake profiles purporting to be a potential love interest to befriend victims, or assuming the persona of a certified investment manager to convince a victim of the legitimacy of the scheme.

This is on top of a fake website created to look like an investing platform. Many of these are poorly designed and easy to spot, but some are extremely detailed and professionally put together.

Scammers also often create WhatsApp groups with a supposedly active community of successful investors, who are in fact members of the scamming operation.

All these ploys, and many others, are designed to instil confidence in victims and convince them that what they’re doing is safe and will make them a healthy profit.

Another tactic, which I hear about a lot from those who contact The Crypto Adviser, is to allow victims to withdraw money during certain phases of a scam.

Why Have Crypto Scammers Given My Money Back?

Some of the people who email me are looking for reassurance that the crypto investment they’ve made is legitimate.

They often point to the fact that they’ve been able to withdraw a portion of their funds which makes them believe they’re involved in a genuine investment.

But this is just another tactic used by the scammers to build trust and confidence, and is very successful as many people will continue to believe their investment is secure as a result.

Unfortunately, though, it rarely works out in the long run, although there are a lucky few that come out on top.

Buoyed by this false sense of security, victims will often feel emboldened to pile in with large investments, convinced that their money has been placed into a genuine scheme offering great returns.

However, everything starts to unravel when they come to withdraw these large sums, including any ‘profits’ that have been accrued in their investment account.

Successful withdrawals from scam sites

Many people who become embroiled in a crypto scam report being able to make one or two small withdrawals at the start of the scheme.

I’ve even heard of people who’ve actually made a profit, especially if they’ve engaged with a TripAdvisor ‘work’ scam.

One person who contacted me said they’d deposited $50 then ‘earned’ $25 by performing repetitive review tasks.

They became suspicious and decided to take out their money, which they were able to do, together with the additional $25, after telling the scammers they were planning to invest a lot more.

However, they didn’t make any further deposits and became one of the very few people to not lose money to this type of scam.

Generally speaking, people make a much larger deposit after a successful withdrawal because they now trust the platform.

Allowing withdrawals is all part of the ruse and only those who refuse to put in any further cash will ever walk away without a much greater loss.

Pig-butchering crypto scams

Scams that ‘fatten up’ victims are commonly referred to as pig-butchering scams, and they follow a depressingly similar pattern.

Victims are often hooked into the scam after an unsolicited approach online through a social media group or dating website, before being convinced to part with increasingly large sums of money.

However, when the victim tries to withdraw their money and ‘profit’, things start to go wrong and they are suddenly hit with unexpected charges, such as taxes, commissions or broker’s fees, or are simply blocked from accessing their account.

Some victims are asked to pay huge Ethereum ‘gas’ fees, or even official taxes, such as Capital Gains Tax in the UK.

These charges are of course fake. Gas fees – the charge levied to transact on the Ethereum blockchain – can add up, but certainly not into the thousands or even hundreds. The only people you should ever pay Capital Gains Tax to is HM Revenue & Customs (HMRC).

All these charges are simply additional tricks used by the scammers to extract more money from the victims, or fattened pigs.

Once the scammers are convinced they’ve got everything they can, they’ll vanish and likely close down the ‘investment’ website and WhatsApp group that the victim was using after a couple of months.

There are hundreds of ‘cookie cutter’ scam websites and social media groups in existence at any given time, with new ones springing up every day.

Should I invest more crypto if I’ve made a withdrawal?

Hopefully this article has made it clear that allowing people to withdraw a small part of their cash is a common tactic used by scammers and should not be seen as demonstrating that an investment is trustworthy.

When it comes to any investing, it’s extremely important to do your own research and thoroughly understand what you’re investing in and with whom before taking the plunge.

Many people I speak to pile into an investment without doing their own due diligence because they’ve been blinded by the promise of large, guaranteed profits.

This is a fatal mistake with any form of investing. Remember the old adage: ‘If it sounds too good to be true, it probably is’.

Getting your money back from crypto scammers

This is a question I get asked daily, and unfortunately there’s no easy answer to recovering funds from crypto scammers.

You should always report a scam to the authorities in your country – it’ll help them build a case and could potentially lead to the return of some or all of your funds.

However, the scammers go to great lengths to cover their tracks, so don’t pin your hopes on recovering your funds any time soon.

There are dedicated crypto recovery firms who may be able to help, but they often charge hefty fees and will only take on cases where the sum of money lost is quite significant.

Final thoughts

The most important thing to do before investing money anywhere is to educate yourself about what you’re investing in and with whom.

There are scammers in all walks of life queuing up to steal your hard-earned cash, and crypto is no different.

Scammers play on the fact that the crypto sector is still largely unregulated, and many people do not fully understand it.

Lots of people have also seen social media posts from people who’ve made millions overnight and they want a piece of it.

This is leading to bad financial decisions which are netting scammers billions each year.

It’s only by educating people about the risks and giving them the knowledge to determine what is legitimate and what’s not will this begin to change.

If you’re concerned about a scam or need some crypto coaching, see our Advice Services page for details about how we can help.

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