Beware of Cryptocurrency Scams – Australian Family Loses $20,000 in Coinexx.org Scam
It has been reported in the Australian news this week that an Australian family has lost their savings in a cryptocurrency scam. The company was called coinexx.org (not to be confused with confused with coinexx.com).
The family had come across the scheme via Facebook.
The family had initially made only a small investment in the scheme in case it was a scam. When they received the payout they were told they would, they invested a bit more. The scheme continued to pay out funds just as it said it would, and the family grew more confident with the scheme. So confident in fact that they introduced a family member to the scheme because it was working out so well for them. Larger amounts were being invested.
The family even gave up their job because the scheme was paying them so consistently. They said they had no reason to doubt the scheme, and restructured their finances around coinexx.org. They were in regular contact with people that worked at coinexx.org, and everything seemed to be on track. The family said that coinexx.org we’re investing time in them, and were there for them. The family saw no red flags, and had no concerns about the legitimacy of the company once they’d started to see returns. They said they saw no signs that this was a scam. The company was delivering what they said it would, when they said they would.
A snapshot of the coinexx.org website.
Things started to go wrong …
Then, things started to go wrong. The red flags started out small. The family were asked to pay a withdrawal fee “to comply with regulations”. The family did so, by taking out a loan to cover the fee, expecting that it would repaid as soon as they got their payments from coinexx.org.
This was the first of many excuses they received from coinexx.org, and the first of the requests for more money. The requests started to escalate. The family did oblige several more times, still not sure that they weren being scammed. They still believed because they had been with the scheme for such a long period of time, and because they had paid consistently up to that point, that they could still recover their money. They believed that the company would release their funds.
After desperately requesting that their funds be returned to them, the family received a message via What’s app, explaining that they’d been scammed:
“Let me save you the stress cus you’ve been through a lot already. Coinexx is a scam. Everything and everyone involved are the same. Don’t bother about trying to get your money. Adam, myself, Claudia, even the customer service is scam. Just focus on money to take care of your family.”
By this time, the family taken out small loans, and had sold some of their possessions. They were unemployed, behind in bills and rent, and were in a dire situation.
So how did this happen?
On the face of it, it seems that coinexx.org was operating as a high yield investment program, which is similar to a Ponzi scheme.
The company were most likely paying people with the investments made by the others, rather than by actually investing the money and getting a genuine return on it, and paying that return back to all of their investors. Trust was built over time because the company had been keeping their word, and had regular communication with their investors.
The scheme encouraged members to reach out to their families and friends to join too, to generate more dollars in to pay others were already in and due to see a return.
How to avoid a scam
There are often some fairly obvious signs of scams. I’ve written before about how so spot an online scam. To summarise, some warning signs might include:
- pictures of loads of cash and/or exotic lifestyles such as yachts and lamborghinis
- claims of fast money for little or no effort
- being asked to spam your friends and family to do sign them up
- when it is unclear about how you are actually going to be making the money being claimed
- websites that lack clear information and only provide sketchy details
- being told that you need to hurry to sign up or you’ll miss out
In the case of coinexx.org, some of the tell tale signs weren’t there. Some were there, but may not have been obvious. There were some grammatical issues with the website, and whilst that would be a red flag to me, this may not even be noticed by most people. In my mind, a company that is claiming to invest tens of thousands of dollars and paying pack huge returns should have their copyrighting and marketing looking 100% professional.
It is SO important that you do your homework when it comes to making money online. Scams can be very sophisticated, like the coinexx.org one, dragging out for long periods of time so that the scam can continue and others can be lured in.
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