Members of the popular WallStreetBets Reddit forum were suspected of a presumable cryptocurrency fraud that could have caused losses of no less than $2 million. By creating a designated Telegram group, they duped investors by guaranteeing remarkable returns through capitalizing on the recent crypto market rally.
The Core of the Hoax
Per a report by Bloomberg, alleged members of the WallStreetBets Reddit Forum used the Telegram messaging service to execute a blatant scam. A particular account by the name of ”WallStreetBets – Crypto Pumps” presented users the chance to purchase a new token certified as WSB Finance before it was listed on crypto exchanges. The operation is known as a pre-mine sale.
The essence of the fraud was connected to the recent cryptocurrency boom as bitcoin and most altcoins skyrocketed in value lately. With some of the digital assets reaching 1,000% gains, the targeted WSB members conned investors into sending money without asking questions and with the potential of netting huge profits.
The notorious account also urged users to transfer popular cryptocurrencies such as Binance Coin (BNB) and Ethereum (ETH) to a designated crypto wallet and then to reach its ”token bot” to gain WSB Finance coins.
However, the perpetrators never dispatched those coins. Furthermore, another message on Telegram revealed that the people who had already issued a payment had to send an equivalent amount again or they would risk losing their initial investment.
After executing the hoax, more than 3,451 Binance Coins were withdrawn on Tuesday (May, 4th) from the wallet inside the Crypto Pumps messages.
Since the price of BNB at that point was approximately $625, the fraud caused losses of more than $2.1 million. Following the scam, thousands of people expressed their frustration and tried to expose the individuals behind the account. Moreover, the quantity of the other cryptocurrency – ether – still remains a mystery.
Two weeks ago WSB admins warned about offers that might try to take advantage of the forum’s name in order to allure the crypto audience. The ”WallStreetBets – Crypto Pumps” account has been removed from Telegram but whoever managed it left a message that might stun the affected victims:
”Buying Lambo now.”