- Crypto traders were scammed out of Binance coins worth around $2 million through Telegram, Bloomberg reported.
- A Telegram account that seemed to be linked to Reddit's WallStreetBets offered a new WSB token to users.
- This is the latest in a series of crypto scams that have cost investors millions.
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A Telegram account that seemed to be linked to Reddit's WallStreetBets forum, but is not actually affiliated with the group, has scammed crypto investors out of an estimated $2 million worth of binance coins, Bloomberg reported on Tuesday.
Investors were encouraged to wire binance or ether tokens to a digital wallet in exchange for "WSB Finance" tokens as part of a pre-mine sale. These sales offer coins for purchase before they are listed on crypto exchanges.
The owner of the digital wallet linked to the scam has since removed over 3,451 binance coins, worth over $2 million, from it. The size of the payments made in ether was still unclear, as was whether the wallet owner had withdrawn the tokens, according to Bloomberg.
Investors never received their "WSB Finance" coins and were told they needed to pay another sum of money to secure their initial purchase due to a server error that affected the new tokens.
The Telegram account had named itself "WallStreetBets – Crypto Pumps", creating the illusion that it was linked to the Reddit forum that drove the GameStop frenzy earlier in the year and has become a hotbed for stock chatter. Apart from a brief exception last month, the WallStreetBets subreddit does not allow discussions about crypto.
WallStreetBets - Crypto Pumps has since been deleted from Telegram, leaving with a message saying the owner was off to spend the money they had made off the scam. Bloomberg reported they wrote "buying lambo now" before disappearing.
Crypto payments are made through a link to a digital wallet, which can be anonymous. The anonymity, which is one of the cornerstones of crypto and one of the main reasons its fans support it, opens up opportunities for scams or other illicit activities. It is one of the key criticisms brought by regulators and institutions.
This isn't the first scam to affect the Reddit community. A few weeks ago, WallStreetBets members were being invited to an app that was not affiliated with the page, described as a "crypto pyramid scheme" by the people behind the account.
"We are strongly anti-monetization. This scam has nothing to do with us." WallStreetBets wrote in a message to raise awareness about scams involving the forum, which is pinned to the top of the page.
Scams have also been on the rise more broadly as crypto-mania has gripped investors over the past year. Regulators like the UK's Financial Conduct Authority and fraud-action watchdogs have issued warnings about a growing number or reports of crypto-related fraud.