BBW25 - Day 1 - Keynote: Crypto Scams

chats. We've had a lot of panels, but we're gonna have a keynote talk on crypto scams and how a blockchain is funding a human trafficking empire. Delivering this talk today is Alex Ring, who's a dedicated fraud fighter with Operation Shamrock. Please join me in welcoming Alex to the stage.

Thank you. Good afternoon. My name is Alex Ring and I know you are excited to hear me talk about scams at a blockchain conference, no less. Do you see?

Oh, okay. All right. I was just sure. Okay. Can you go back one slide, please?

Okay. Thank you. Sorry. As I mentioned, um, my name is Alex Ring and I am a CEO and founder of Eegis Resolve. It's a forensic accounting firm that focuses on cryptocurrency investigations.

I'm also a member of Operation Shamrock. I know some of you have heard of Operation Shamrock here. It is a nonprofit organization that fights against crypto enabled scams. Our mission is simple. educate, mobilize, disrupt, educate communities, mobilize people to fight against scams, and then disrupt financing of transnational organized crime.

So, I'm going to get straight to my point. If you ever received a message that maybe looks like this, I know the screens are small, but I hope you can see it. It is a seemingly wrong number. And you in our nature is to ask, "Who is this? Who is texting me?"

And then you may receive a picture of a very young pretty woman. Maybe you got something like this, a recruiting text message from, let's say, Amazon or maybe Indeed, maybe Target as well. I know you got this one. your unpaid tolls, your DMV sent you a text message and somehow state of Connecticut, their email address looks like this. I don't think so.

You may have received an email that looks very legitimate and it's telling you that you can invest 50 bucks in crypto in Bitcoin and it's going to take you to the moon and it looks very legitimate. But maybe you even get a flyer like this that it's filled with grammar errors. Maybe it's a bank code that somebody requested. This is the one that I'm going to go down for. Somebody invited me to a barbecue.

Few months ago, somebody texted me and said, "The stakes are out of the freezer and the wine bottle is open." I looked at my husband. and I said, "This is how I'm going down." Maybe it is a Monday morning and you wake up drinking your coffee and you get randomly added in a group chat where Evelyn is offering you a job at Amazon and then she sends this share nudes here and then she does. It is 8:28 on a Monday morning and I'm seeing somebody private parts.

But if you think that all of these are not related, I'm here to tell you differently. All of these are part of something much much larger. This is what is scamming your grandma and my aunt Susan. This is an international and global problem. Australia, UK, even the FBI is starting to notice things.

And you know the problem is Syrians when the feds are paying attention. This is how your neighbors are losing their hard-earned money. But all of this is a part of something much more sinister. Amnesty International, a leading organization that fights for human rights, published a report earlier this year said that there is over 200,000 human trafficking victims held in Cambodia alone. Over 53 scam compounds.

It is happening in Africa and it is also happening to our children where extortion scams are becoming number one leading cause within the last two years of teen suicide. Let that sink in for a moment. So what I'm really talking about it's called pig butchering scams. And pig butchering scams are a most popular scam in the world right now. This is not me saying that.

This is Chinales is saying this in the FBI IC3 report. It is on the rise in United States alone 66% year-over-year and 40% on a global level. I know it sounds scary. It originated in China. You see a term on the screen called Shazup Pan.

And that term loosely translates from Chinese as fattening up the pig before the slaughter. These scams are online. And yes, you guessed it. They do involve cryptocurrencies. And there are long cons, long-term cons.

They're not today for today's scams. They do not care for that. They want to develop and break down your character and your personality, and they want to steal all of your money with cryptocurrency. So, this is how it usually goes. I'm going to talk to you only about investment scams because those are the most predominant in crypto industry.

But there's Roman scams, data breaches, employment scams as you've seen. But they all start the same way online because I told you that there are human traffic invictings held in Southeast Asia and Africa. So they will reach out to you via text message on social media. If you're on a dating app, they may send you an email. They may reach out to you on your LinkedIn.

They're going to start a conversation. And you may think, "Alex, why would I engage with a stranger?" But during COVID 19, that's exactly what we did. Because we couldn't talk to our friends and family in person, we started engaging with people online. So, it became a social norm that we're talking to strangers online.

I talk to hundreds of people on LinkedIn almost on a daily basis that I have never met in person. And you may be lonely. You may just move to a new town because you changed jobs. Maybe your family moved away during COVID because we all know everybody ran away from Boston and New York into Connecticut and other New England states. Once you start talking to them, they're going to ask you to move the conversation to WhatsApp or Telegram.

And that is by design because WhatsApp and Telegram are endtoend encryption apps, which means that law enforcement cannot really access it the way they can do with social media messaging apps. Once they do that, they're going to start building trust. And that building of trust, it's not going to be two, three days. Now, they're going to spend seven months talking to you. I have engaged with a scammer and I will show you examples.

And we talked for three months. And it took her two months to introduce an investment opportunity. So for two months, I talked to a person every single day who wished me a good morning and a good night and showered me with affection and love. So if you are in a spot where you're looking for a partner, they will be a partner for you. If you're looking just for a friend or somebody to talk to, they will do that as well.

They will figure out what you need because they're trained to do that. And then once they figure out who you are, what you need in that specific moment, they're going to tell you about an investment opportunity. They're going to send you to a legitimate crypto exchange like Coinbase, Kraken, Gemini, Binance. Pick your exchange and they're going to tell you invest a small amount. I made a lot of money because my aunt is a Harvard business graduate and she taught me how to invest in crypto, but you are an inexperienced investor.

So, why don't you just put in $1,500? Go to Coinbase, buy $1,500 worth of crypto. And then you do that. And then they tell you, you know what? My aunt just told me that this is the website where you can make more money.

Don't leave your money in Coinbase account. Transfer it right here. And that website may look something like this, which is a fake website. May look something like this, where it looks like it's endorsed by Tesla, right? Elon Musk.

It may look something like this, like a fake Binance website. How do I know it's fake? Because their domain is launchbad.com. [Music] But sometimes we do not pay attention to those details.

And so what you're going to do is you're going to put your $1,500 into this fake Binance account. And then you're going to spend four days monitoring it. And what is going to happen to that $1,500? It's going to go up to 4500. And you're going to think, "Holy cow, I just found a gold mine."

Then the scammer is going to tell you, "Just take that money out. You saw that the website works. I don't want you to lose any money. So, just pull your initial investment and they're going to let you get back your initial investment. That is what is going to make it look legitimate.

And then you're going to go home. They're not going to say anything. They're not going to put pressure on you because they're doing that by design. They want you to think about the investments that you're making. They want you to think that you're in control.

And what is going to happen is you're going to go home and you're probably going to log in to your Roth IRA or maybe your investment portfolio that you have with Adjones and you're going to start to think, hm, my portfolio is performing at 17% on a year basis, but this crypto website is performing at 250%. So, I am probably going to move some money. And then the scammer is going to ask you, "How about you put in $10,000 now and see how that goes?" And you're going to do it. You're going to put $10,000 because that's exactly what I would do.

Because why wouldn't you invest in a website that makes you 250% profit? And then over the next couple of months, you're going to pull all of your savings and all of your investment. You're going to invest $550,000 in it. And that's going to sit. You're going to look at your profits go up.

At one point, you're going to log into your fake Binance website and it's going to be $1.7 million. And you're going to say, "That is a pretty sweet spot. I'm going to pull my $550,000 initial investment and I'm going to pay off my debt. I'm going to pay off my house."

And then that is their exit strategy. They're going to tell you that either your account is locked because you didn't pay a tax or because you pulled $1,500 without paying any tax. And they're going to tell you that they need $23,000 for that tax. So, you're going to borrow it from your friend because you're in a few days going to have $550,000. You're just going to give it back to your neighbor or your friend or whoever you borrowed your money from.

You borrow it, you pay the tax, and then they're going to say you have to pay another tax unfortunately because of President Trump's tariffs. And that tax is $88,000. And then you start to think, I think I have just been scammed. And hopefully you're going to go to your local police department and you're going to report the scam. And hopefully your law enforcement is going to know how to investigate crypto crime.

But unfortunately, less than 5% of US law enforcement is equipped to investigate crypto crime. So that is a problem and they will probably not investigate it. And you're probably sitting here and thinking, well, Alex, this is a blockchain conference, so we obviously understand crypto. So who in their right mind would invest $550,000? It must be the uneducated or less educated or people who do not understand crypto or grandma and grandpas who are hanging out on the internet where they're not supposed to.

And I'm here to tell you that you're wrong. I'm not going to make you read all that, but I did highlight a couple of things. Confidence enrollment scams. The difference between the 30 year old and the 50 year olds is not that big. and also credit card and check fraud.

We all think it's our parents and our grandparents. Okay, my father-in-law is a prime target for them. He's 78 years old. He just got a phone call a few days ago. Somebody pretending to be my husband.

And it took a long time to tell him that indeed it wasn't my husband calling him. He wasn't in trouble. He wasn't arrested and he didn't need any money put in into a crypto ATM machine. data breaches. The 50 year olds report less scams with data breaches.

That means that us millennials and Gen X click on more links that we're not supposed to. Investment scams, the one that I have explained to you, 50 to 59 year olds fall for it less than the 20 and 30 and 40 year olds. That is a problem. and misconception around scams. It is not just for a less educated.

It's impacting everybody. I did talk to a scammer for 90 days and it took 47 days for her to introduce an investment to me. But every single day she told me, "Alex, I hope you achieve everything you set out for yourself today. I hope you go out there and seize the day." We moved our conversation to Telegram and she was the nicest person that was lovebombing me every single day for 90 days.

In one point when she didn't text, I started to wonder what was she doing. And I damn well knew that she was a scammer in a scam compound and probably a human trafficking victim. But that is how they get under your skin. FBI IC3 report that is annually issued by FBI talks about how much money Americans are losing to crypto scams. And this is the reason why I got a keynote at a blockchain conference because the FBI said initially we lost $9.

3 billion dollars to cryptocurrencies. They have updated that number and it's 12.9 billion dollar so far. But there is a caveat to that. They're saying that less than 30% reports these scams.

That means Americans are losing upwards of 35 billion with a B dollars a year. 66% increase in losses from 2023. That is a problem and this is why we have to talk about it. So why this and why now? And who the hell is scamming us?

If you guess China, you guessed right the obvious uh player in this game. China in 2013 has started a belt and road initiative and it is their $1 trillion infrastructure initiative that sole purpose is to destabilize US dollar. They're doing that by dealing with countries around the world in any other currency than the US dollar. But then something happened in 2020 that pushed us onto social media where we were scrolling and looking at cats doing funny things and we were looking how to start a sourdough mix or bread. In Southeast Asia, there was a lot of casinos, specifically Cambodia.

And then one of a sudden, those casinos were empty. They weren't making any money. So, they figured it out how to do it. Chinese mafia moved in and they turned it into human trafficking centers. Thailand, Myammar, Laos, Cambodia, Philippines, they're all hubs.

You can all figure out that there are some bad things happening in that area. civil war, a lot of unemployment due to COVID and human trafficking. The UN estimates that 350,000 people are held captive in Southeast Asia alone. I say that number is probably underestimated the same way we have underestimated how much we're losing. I say we are probably at a half a million people held captive and forced into slavery in 2025.

And they're doing so the same ways that they're getting at us and stealing our money. Online job posts on Facebook, you have probably seen them the same way you get them on your phone. That's how human trafficking victims get the same messages. Facebook groups, WhatsApp. Have you ever randomly been added to a WhatsApp group?

The same principle applies to them. This is all happening to people who were largely impacted by COVID third world countries for people who are looking to make a living. They're looking for better opportunities. They're applying to jobs thinking that they're going to travel and go and be admins and IT and customer support and they're going to make five times more than what they're making in Bangladesh, India, Cambodia or wherever, Philippines. And I put down Meta's role because I like do like to call out Meta because they do own a monopoly with social media.

And I know that if you're on Facebook or Instagram on WhatsApp, you have been flooded with scammers on it. my group, Main [ __ ] Lovers of New England. I have recently found out that it is a 2500 member group that was a scam entirely. So, this is a picture in Myanmar precoid and this is the picture postco. This is how fast they are building huge facilities where they're keeping human trafficking victims.

And we're tracking in these scam compounds atrocious things. Besides that, they're held there against their will. They're tortured, beaten, starved to death, sexually assaulted. There's a high rate of suicide and murder happening over there. And what are they're doing with all of that money that they're stealing?

They're laundering it. I like to say scammers do not want your crypto. They want cash just like the rest of us. They're doing that through legit businesses, through cryptocurrency exchanges. I know it's heartbreaking, but we all know that they're doing it and that they're hosting scammers on their platforms.

Chinese moneyaundering networks and marijuana farms across United States is something that we're not talking enough about. But if you Google it, you will find out so many things that are happening. Chinese moneyaundering networks are money mules here in United States. Chinese students who are turned into money mules. Chinese housewives who are buying expensive things and then sending them back to China.

In 22 states, Chinese nationals have bought a land where they're growing marijuana. Maine has a huge problem. My home state of New Hampshire just had a recent scandal where a Chinese businessman has bought land for five times the asking price. Nothing fishy there, right? Well, once we looked into why did he buy that, we realized that he got access to the state's water supply.

And oh, by the way, it is a near a military testing facility and it is also close to Boston Logan's FAA. They are all over United States. 22 states, California, Michigan, New York, Massachusetts, Ma, New Hampshire, Vermont, you name it, they're in there. It is a multibillion dollar business because they need to launder billions of dollars that they're stealing from us. And this is one way to do it.

They have partnered up with Mexican cartels because we know that US banks are laundering money for US cartels. That shouldn't be a groundbreaking information at all. So my husband tells me yesterday morning, hey, did you hear that 170 Sinaloa cartel members were arrested across New England? What is Sinaloa cartel doing in New England? You're wondering, we're not near a Mexican border.

Well, we are near a lot of marijuana farms where Chinese nationals are laundering money. So, who is really enabling this? We can point fingers at so many different players. Crypto exchanges, they're a known actor. They're hosting crypto.

Obviously, they're hosting scammers. Banks. I like to call out banks because they're one of the largest industries in the world and yet they're running their KYC and AML programs like it's 1984. and they do want to get into crypto and be innovative when they cannot even keep track of your checking account. Government, I joke, the government is not going to come and save you.

I serve in United States military, so it's more of an inside joke, but the government is not passing any laws that are protecting the consumers. We had an entire crypto week few months ago in Washington DC and yet a single bill that has passed did not address the problem of consumer protection. We all fought around stable coins. Yet 84% of stable coins are used for scams. Big tech.

I mentioned Meta, but they're not the only ones to be called out. How many scams do you get on your Gmail account? Amazon is looking into getting into a stable coin game without being held accountable as a financial institution. Your AT&T and T-Mobiles of the world are allowing your text messages to go through and are allowing your aunt to respond and get scammed and lose her entire savings. Also, they're allowing one person to buy up to 10,000 SIM cards.

So, they're hosting SIM farms and scamming you. So, you report a number, they just open up a new one. Why are we not regulating that? So, what can you do? I know I talk about grim stuff, but I do have solutions for you.

On a personal note, please do not send money to strangers that you meet online or otherwise. Do not click on suspicious links. I am not one to talk to because a month ago I got hacked because I clicked on a link I was not supposed to. And I do this for a living, but they're that good. They pretended to be somebody I thought I knew, but I didn't pay attention.

They hacked all of my data and I had to reset factory reset all of my devices. I know it is a first world problem, but have you ever had to do a factory reset and lose everything? It is painful. I'm still recovering from it and downloading apps on my phones and reaching out to people to figure out who they are. Do not reply to messages and emails that look suspicious.

Even if you're bored and you want to mess with them, it's pointless. And they're human trafficking victims and there is hundreds of thousands of them. And since we're at a blockchain conference, I know a lot of you are in crypto or crypto adjacent industries and there are things that you can do. A lot of you may be in leadership positions, but you can pay attention to how you're doing your due diligence and your KYC. know your customer and are you prepared for all the AI and deep fakes that are coming out of Southeast Asia?

Continuous monitoring, not just for law enforcement and not just for fraud, but in general. Employee education, I always put that there because number one prevention in fraud, any type of currency, fiat or digital, is employee education. Invest in compliance programs. Educate people how to spot fraud, how to spot scams, law enforcement cooperation. I train law enforcement and I know how much they struggle with getting back the subpoena requests.

Currently, my law enforcement in New Hampshire when they're submitting a subpoena to Meta or Google, 65 days is a minimum for them to get something back from Meta or Google. That is unacceptable considering crypto moves in minutes. We all know that and that's why we love it. What else you can do? Advocate for better regulations.

And don't worry, you don't have to chase me to the parking lot to beat me up because I'm not going to say we need to regulate crypto. I actually believe that there are better ways to solve this problem. Consumer protection is number one. If we're going to regulate crypto and make banks and Wall Street and tech be involved in this game, they need to do something to protect us. We need to update bank secrecy act.

We need to make a recovery fund for victims. We need to force banks to invest into technology and compliance and anti-money laundering. These are the things that they're not doing and we're not forcing them to do so. Tech safety and we always going to talk about that because our children are affected by this. Our children are leading into suicide because they're being extorted on social media.

And this is not just Facebook, it's Tik Tok, it's Snapchat. And if you think that this is not a national security problem, think again. I just told you the Chinese mafia is buying land near our military sites in 22 states and they're getting access to our water supplies. And we're not talking about this enough because we're too busy talking about things that in grand scheme of things do not matter. You will not see this in the mainstream media and we're asleep behind the wheel.

So I'm going to leave you with this because I only have one minute left. But I'm going to ask you to think about the compliance programs and I'm going to ask you to think about employee education. And I'm going to ask you to talk to your friends and family and talk about scams and talk about how much money we're losing. And I do know that you have lobbyists on your payroll. So please do advocate for the right things.

Let's not overburden the cryptocurrency industry and let's make it legitimate and let's make it safe. Thank you. Wow, that was a sober presentation, wasn't it? Um, I hope everybody learned a lot.