Abu Dhabi businessman loses $20,000 in crypto scam after mistaking scammer for vendor

The Indian national was impressed by the fraudsters business acumen and was convinced of the scheme's authenticity

Follow us on Google News-khaleejtimes

Image used for illustrative purpose.
Image used for illustrative purpose.

Mazhar Farooqui

Published: Wed 6 Sep 2023, 5:41 PM

Last updated: Wed 6 Sep 2023, 10:32 PM

An Indian businessman in Abu Dhabi has been left devastated after mistaking the scammer's identity as his previous vendor with the same name, resulting in a loss of $20,000 (Dh73,461) in a well-executed cryptocurrency scam.

Rashid Alam (name changed upon request) said it all began innocuously in March with a WhatsApp message. An individual identified herself as Nancy reached out to him from an overseas cell phone number, inquiring whether he "still needed some products".

Rashid explained his past experience of procuring industrial chemicals from someone named Nancy for his former business venture in Ras Al Khaimah led him to fall for the deception. He responded believing it was the same Chinese vendor but clarified that he was no longer involved in the chemical business.

The brief exchange quickly evolved into conversations about their work and family. Rashid was impressed by Nancy's business acumen. She said she managed a thriving textile business with satisfied clients across the Middle East, including the UAE.

The two started chatting regularly; before long, their budding friendship took a turn. Nancy began sharing details about her uncle, who she claimed was helping her earn money through cryptocurrency trading. Despite Rashid's initial scepticism, his interest grew when Nancy mentioned the possibility of operating his online trading account.

Reluctant to take a substantial risk, Rashid opted to dip his toes in the water by investing $1,000 in a cryptocurrency trading platform recommended by Nancy. His initial capital grew to $3,000, to his amazement, within a few days. He withdrew the initial amount and left the profit within the platform. "I transferred $1,000 from the trading account to my Binance account and from there to my bank account. The process went smoothly. I was delighted," Rashid recounted.

Rashid said he was exploring investment opportunities for his flooring business when Nancy introduced the idea of achieving remarkable returns through the platform's leverage programme, which required a $20,000 investment. Rashid's wife, Saima (name changed), said her husband was added to a WhatsApp group comprising individuals who had purportedly invested in the scheme, and they were sharing screenshots of their profits. "There were even individuals with UAE cell phone numbers in the group," said Saima. "When I contacted them via WhatsApp, they responded enthusiastically, sharing how they had gained significant profits through the leverage scheme."

Convinced of the scheme's authenticity, Rashid invested $20,000. However, when he attempted to withdraw his profits, he was informed of a 30% tax requirement. Saima shared that when she inquired about this with others in the WhatsApp group, they claimed they could withdraw the funds after paying the taxes.

"We became suspicious," Saima recalled, "so we attempted to contact the alleged investors from the UAE, but none of them answered. That's when we realised it was all a scam, and we had been deceived."

Phone calls placed to these cell phone numbers by Khaleej Times confirmed that they were inactive or not in service.

In April, Khaleej Times reported how an Arab businesswoman in Sharjah lost over a million dirhams to a similar scam. Sara, who runs a confectionery business, was deluded into investing in a crypto trading programme after being befriended by a cybercriminal on WhatsApp.

Investigations have since revealed that the crypto trading platforms recommended to both Sara and Rashid were fake. They were designed to simulate trade activity and mislead investors into believing they were making huge returns.

In January, Khaleej Times reported on an ex-IT director in Dubai losing Dh650,000 in a crypto-romance scam involving a fraudster named Coco. Last year, a similar scam cost Ajman resident Sajjad Khan $47,000, as covered by Khaleej Times.

Scammers behind the racket called the pig butchering scam, use social media, dating apps, WhatsApp, and text messages to make contact. They often start by pretending to have made a mistake and continue talking even after being corrected. Over time, they build trust and persuade victims to invest in cryptocurrency trading, offering insider tips. They guide victims to download an app or visit a website, which the scammers secretly control.

UAE law authorities have consistently advised vigilance on social media. Cybercrime is projected to cost $10.5 trillion annually globally, as reported by leading researcher Cybersecurity Ventures. Billionaire Warren Buffet ranks it as humanity's top problem, with cyberattacks posing a greater threat than nuclear weapons.

The scammer’s playbook:

  1. Initiate contact with the target by sending a “wrong number” text message or through a dating app.
  2. Build a relationship through friendly, romantic messages over several months
  3. Encourage the target to invest money in a crypto trading platform
  4. Gain trust by letting the person withdraw small amount as supposed profit.
  5. Seek bigger investment.
  6. Disable the website and disappear with the money


More news from UAE