This is pretty embarrassing to admit, much less blog about. But I recently nearly fell for a YouTube ad scam. I don’t want my readers, (yes, all twenty of you), to fall into that trap. And since there are thousands of new crypto investors onboarding each day, I think this is an important topic to cover.
I consider myself a pretty sharp guy. High risk / high reward investments are nothing new to me, having spent years betting on sports, with reasonable success, in the 2000’s, I learned quite a few strategies through firsthand experience. One of the quotes (can’t find it right now) that stuck with me goes something like this:
“Return on your investment is not as important as the return of your investment” (again, this is paraphrased).
I consider myself quite careful with my funds. I double check the wallet address when sending crypto to another wallet. I even send a few dollars first, make sure it went through and then send the rest. So, how did I get caught up almost losing more than a month of most people’s net salary? Let’s some of the characteristics of this particular scam so that you can see the red flags that I didn’t notice right away.
I Believed That the Link Was From a Trusted Source, But Didn’t Bother to Verify
And truthfully, it appeared to be from a trusted source. My first mistake here was not looking closely enough to determine that this was an ad and not a link from the channel’s creator. The ad appeared directly under the video from someone who I listen to on YouTube. It was an image that led to a Telegram account right under the video. Many YouTubers will say something like “click the link in the description below,” so I thought that this was a direct link to his Telegram channel. The channel in question was none other than the PG, family-friendly, Cardano-bashing, Tri-State orange eating champion, Alex Becker. And while the ad was directly under his video, I can say with absolute certainty that he had nothing at all to do with this scam.
How do I know he had nothing to do with this YouTube ad scam? Because the same exact ad appears under several popular crypto YouTubers along with their respective likenesses, including BitBoy and Ran from Crypto Banter.
Side note: I can’t believe some people apparently get mad at this guy! I’ve personally invested in a few of his crypto gaming plays that made sense to me and they have all been on point. Plus his videos are hilarious at times as well as enlightening. I’ve learned quite a bit about crypto gaming, which I had zero background knowledge about. Obviously none of what I write is investment advice and please do your own research (see our Disclaimer) but that’s been my experience.
Arbitrage opportunities exist on crypto exchanges, more than they ever did back in the day on sports betting exchanges, so I was interested in investigating further. The ad was said “My Arbitrage Deal” with Alex’s likeness. I clicked the link and joined the Telegram (I didn’t have one before) and added a channel, again which featured an image with Alex’s likeness and a stated subscriber base of around 11,000.
Within seconds I was hit with a message that said “Welcome to the Alex Becker Arbitrage Channel.” Further down the screen it said there was a UniSwap arbitrage opportunity in progress. It said that the status was working, profit was around 40% and that the risk level was “risk free.” Now, again, before you wag your finger and say something like, “well if it sounds too good to be true…” I’ve read posts from some legit investors who have done risk free “arbs,” buying on one exchange and selling on another where there was a significant price differential. Also, in the DeFi world, 1000% returns are not unheard of, so I was willing to give this a shot.
There was a step-by-step guide on the page, but I didn’t investigate any further at that time as I was headed to job #2 and figured that there would be other arbitrage opportunities I could take advantage of at another time. I went to work and didn’t think anything much more of it.
The “Arbitrage Opportunity” Didn’t Change.
The next morning, I got the same message again at around 5:30 AM. This was a small red flag to me. In sports betting when an arbitrage opportunity presented itself, you had a few hours, maybe a half a day until the markets properly adjusted for it and it was gone. But again, I wasn’t sure of the timetable for these things in the DeFi world, so I marked it down to look into on my lunch break.
I got the same message again, just before lunch. When I read further, it said “Essentially, we’ll be swapping ETH to LINK on a decentralized platform called Bounce.Finance. It’s a platform used by thousands of people for automatic token swaps.” It said that a minimum of 1.05 ETH was needed for this transaction, since you’d need 1 ETH and some extra for the gas fees. I thought that number seemed a little low since ETH gas fees can swing wildly depending on the time and day. Another tiny red flag presented itself and should have clued me in that this “arbitrage opportunity” was just a YouTube ad scam.
It went on to say something like ‘LINK tokens are locked at a fixed price of 1 ETH = 240 LINK, that’s about a 40% profit compared to the market price on Binance.’ I’d heard of Bounce.Finance and of course, Binance, so I thought that I’d check those numbers to see if it still was in play.
I Could Not Verify the Details of the Arbitrage Opportunity.
When I went to Bounce.Finance I got the following message:
Service Not Available in Your Region – Sorry! For compliance reasons, this service is not accessible in your area. Use of VPN, Tor, proxies or other means to circumvent this restriction is a violation of our Terms of Service. For details, please see our Terms of Service. Please note. The dapp is only open to non-U.S. and non-China persons and entities. All registrants must meet eligibility requirements to participate.
This red flag just slapped me in the face. Becker seems to be in the U.S. so why would he pitch an arbitrage opportunity on a site that residents can’t access. Further down the message I saw the following: “Go straight to this link of the swap and connect your wallet (link follows) Do NOT use any other swap link or pool ID. This is the only one that has been tested by our community.” When I saw that, I knew this was likely a scam. So I typed in “bounce.finance scam” and found this Reddit post from earlier this year. And while I was pissed at myself, I thanked God that I didn’t just jump right in.
Who’s At Fault in a YouTube Ad Scam?
Well, obviously the shitbags who created this scam are. I don’t blame any of the crypto guys. Their job is to create content, not police the internet. They don’t have control of the ads that appear on the platform. That can only mean… I’m looking at you, YouTube! Now, could I be wrong? Sure, but before you argue that YouTube can’t screen every single ad, please keep in mind that they routinely shut down channels for “misinformation” or some vague rule violation with the quickness. Since they’ve got the technology and manpower to silence creators who speak against their preferred narrative, they sure as hell can take down some ads that are ripping people off for thousands of dollars at a time. So, while I’m not aware of the law regarding this, or YouTube’s policy on ads, I’m reasonably certain that, given their approach to content creators who fail to see the world as they do, YouTube likely has the capacity to stop these ads from appearing again. This YouTube ad scam seems to me to be something that they alone can put an end to.
I have a tendency to be careful, but my risk profile is aggressive. When I select a play, I don’t just all in, I go balls deep. I will remind myself to be more thorough in my analysis before I place my bets. This particular YouTube ad scam would have hit my bankroll significantly.
This post isn’t for me to vent. Even though I did not lose money here, its pretty embarrassing to write about. I’ve already learned my lesson. This is for those of you out there who may stumble across this ad on one of many crypto channels. Be careful out there guys. Crypto and DeFi land is like the Wild West. And I don’t mean Will Smith’s goofy Wild West, either. Scams and rug pulls are littered throughout the landscape of unreal returns. It can be unforgiving, especially for those who are new. Be safe out there and remember that return on your investment isn’t as important as the return of your investment.
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