A few months ago, my friend David lost over $10,000 in a crypto investment scam involving a so-called VIP trading signal service. David, who had been dabbling in crypto for a few years, received a direct message on Instagram from someone claiming to be an expert crypto trader. The person promised exclusive access to “VIP” trading signals for a monthly subscription fee.

At first, David was hesitant. He had seen a few similar services but didn’t want to risk his funds. However, the person on Instagram seemed knowledgeable and even shared a few “success stories” of clients making huge returns. They used the pressure tactic of “limited spots available” for their premium membership and claimed it was invite-only, which made David feel like he was getting into an exclusive opportunity.

The initial fee to join the VIP group was only $500, and David thought it would be worth it to have access to high-level trading signals from someone who seemed to have a track record. Soon after paying, he was given access to a private Telegram group where the so-called expert sent out daily trade signals, suggesting which coins to buy and when to sell. At first, David followed the signals and saw some small profits, which made him even more confident in the service.

Encouraged by the success, David invested more. He deposited an additional $3,000 to try the service with a larger position. Unfortunately, when he tried to make a withdrawal, he was met with numerous excuses and delays. The group started becoming less responsive, and the trade signals stopped making sense. The expert, who had previously been very active, went silent.

After a few days, David discovered that the Telegram group had been deleted, and the Instagram account was no longer active. Upon further research, David found out that the person behind the service had been running multiple scams under different aliases, preying on inexperienced traders with fake signals and fabricated testimonials. The signals were designed to encourage losses so the scammers could pocket more money from the membership fees.

David’s painful loss could have been avoided had he done a bit more research. Now, he has learned to never trust any investment advice or trading signals from social media, especially when there is no clear track record or official platform backing them. Always take time to vet any service before handing over any funds, especially in the crypto space.