Experience Report: How I go robbed with an OTC Scam
Experience Report: How I go robbed with an OTC Scam

User Report: How I got robbed with an OTC (Over The Counter) Trade

in CRYPTOCURRENCY NEWS/ICOs (INTIAL COIN OFFERINGS)/TRADING CRYPTOCURRENCIES

Recently we saw someone in a chatroom telling about a sad story. The guy got robbed in an Over-the-counter deal in a Telegram group for such kind of transactions. Obviously, he is still angry about what happened and searched for a way to spread a warning to the community, trying to effectively reduce the number of scams and learn from his expensive lesson, so he can pull something positive for others out of his pitiful situation. We want to help him and make sure our readers won’t fall for the same scam. Thank you, Samo for compiling your story into an interesting read. And now read and scare while reading this cryptocurrency thriller. The following content has been contributed by Telegram user @samurai007 – Please contact him if you have further ideas, hints, information for his hunt.

On average there are about 9 million dollars a day stolen in the cryptocurrency market. Who knows what would be the number if all small thefts, scams, and hacks that nobody knows about would be considered. If you get robbed on the street you call the police but what can you do if you get robbed in cyberspace. Well, this article is one of the things I will do about it.

I made a mistake, done things to quickly and lost quite some money which was stolen by a scammer on Telegram chatroom group called OTC Trade NEP5, ERC20, ICO. There were a lot of interesting offers with slightly better prices than in one other well-known group. This should have been the first warning. Those compelling prices, which were set a little below the OTC market prices, the purpose is to attract as many traders as possible. One other thing that acted as a positive impression was a large number of members which gave me some sense of security. Those numbers were fake in my opinion. The group had more than 5k members. I am not so sure if the trade offers were real at all. The group had just one administrator Dmittri W with a username @Dmittri1986. This should have been another warning for me. I should have stepped away but I didn’t. Albert Einstein said that anyone who has never made a mistake has never tried anything new.

So why even try such trading if you have trusted regular exchanges where you can make a trade not worrying that you might lose your money while doing the trade?
I have heard about the OTC trading and started to read about this hidden market to learn some basics. Soon I have found out that the OTC market is way bigger than regular cryptocurrency market and probably all major transactions happen there.

I believe most people didn’t hear about the OTC trading or know just a little about it, which is why I will make a quick abstract from the articles I have read. It is also important for me to inform you about this way of trading despite the fact that my main goal is to warn people about the scams and scammers that come with it.

OTC (Over the Counter) trading is basically a trade that is done by one buyer and one seller behind the scene and bypassing the exchanges. That kind of trading is done for a long time in various markets. It is preferred by wealthy investors or hedge funds who make large transactions.
Recently OTC is done by brokers and some platforms developed by cryptocurrency exchanges. It is also done through chat rooms.

It is necessary to explain why someone would choose the OTC trading over regular exchanges.

PRICE …you can get a better price which you negotiate with the seller.

LIQUIDITY …there is a lack of liquidity on some exchanges, trading pairs, tokens/coins. That is especially problematic when you want to fill a large order.

SLIPPAGE …slippage refers to the difference between the expected price of a trade and the price at which the trade is actually executed. Slippage often occurs during periods of higher volatility when market orders are used, and also when large orders are executed when there may not be enough interest at the desired price level to maintain the expected price of the trade.

LIMITATIONS …cryptocurrency exchanges often set trading limits as KYC (Knowing Your Customer), day trading and withdrawing amounts. Completing larger trades and exchange KYC verification processes are time-consuming.

Those are the obvious problems regarding regular exchanges trading in the cryptocurrency market. Selling hundreds of millions of dollars of bitcoin on a public exchange in a short period of time could crash the market due to lack of liquidity. So with the OTC trading, you can make large transactions with which you don’t disturb the market prices and you don’t become bait for crooks. You can discuss and set the price and complete a trade instantly.
One research company has concluded that the OTC market of bitcoin is at least two to three times larger than the exchange market, so 1 to 1.5 million BTC is traded the OTC daily. Not all transactions show up on public blockchains as many venues omnibus accounts so only net changes to their positions will be written to the public blockchain.
That is why the movement of the cryptocurrency exchange market is unpredictable and the market often demonstrates an extreme rate of volatility. If the bitcoin exchange market only accounts for 25 percent of the actual volume of the dominant cryptocurrency, it is that much more difficult to find the cause of the movements of BTC and other cryptocurrencies which also follow the movement of bitcoin.
OTC trading has a major role in the cryptocurrency market and many traders are aware of that fact. More and more traders use the OTC every day, there are also those who are restricted or limited to trade due to national regulations of cryptocurrency trading. Not just the big players, but also regular traders, who see the OTC trading as a good opportunity to purchase a coin/token for a slightly better-fixed price, try it. Which means there are smaller sums involved in separate trades, less experienced traders and limited regulations. So this becomes as an El Dorado found again for all the scammer, thieves, and opportunists.

There are many paths you can take to make an OTC trade but there are also many wrong turnings. You can do the OTC trade on ATM machine, you can find a broker (which can be quite expensive), cryptocurrency exchange OTC platforms or chat rooms. Many regular traders use chat rooms to discuss different projects, prices, trading techniques and other stuff regarding cryptocurrency market and trading. Telegram and Discord are two of the most popular chat rooms in a crypto scene. They are used by traders and different projects who can join or create specific groups. Such groups are also created and used for the OTC trading. Chatrooms OTC groups have almost no regulations and legal criterions. They are managed by administrators who usually offer escrow service in exchange for a fee as well. The reputation of the OTC group and administrators are probably the best indicators if one should choose to make a trade and trust the escrow provided. Some groups also offer whitelisting and KYC from both parties and escrow to make sure that you know with whom you will make a deal.

Trading via chatroom has a history and is used even more today. First major Bitcoin OTC trade was done on an IRC chatroom channel #bitcoin-otc. The trade itself is quite simple. Basically, you can post your offer that includes information of the trade you wish to complete, where you specify the type of a trade, the coin/token pair and amount you want to trade and finally your price proposal. You must then wait for the counterpart contact. You can also just respond to an existing offer. Both sides negotiate the conditions and specifics and make a deal by themselves or with the agreed escrow.
This way of trading can be used for all cryptocurrencies or some tokens that are not officially available on the market. People even sell the ICO (Initial Coin Offering) allocations that are hard to get.

You can get stuff on the OTC that you can’t anywhere else. This aspect has another appeal for regular traders as they can buy some potentially worthy coins/tokens for a good price before they hit a market. Another opportunity for scammers to seize and another warning for traders to stay away as those kinds of trades are often accompanied by greed and lust for money. Chasing good prices and quick profits is where people lose their mind and forget about safety. One must always remember that in the cryptocurrency market it is always better to err on the side of caution.

I wanted to buy a token that I couldn’t get an ICO allocation for because of the difficult entry conditions that were set by this project’s team. I have missed the allocation at the end of this long procedure to be whitelisted for a crowdsale. FOMO (fear of missing out) stayed with me. I decided to give the OTC trade a go. I found this one Telegram group that had a good reputation, many members and administrators who were whitelisted and posted an offer after completing whitelisting myself. Everything was ok. At first, I posted a very low price to see how others will react to it and after nothing happened I raised my offer’s price. I was curious about the OTC market prices of the token I was interested so I looked for another OTC group. I found, already mentioned one, OTC Trade NEP5, ERC20, ICO with this one administrator Dmittri W with a username @Dmittri1986. I checked the prices which were slightly better than those in the other group and posted an offer. I didn’t pay much attention to this group’s reputation and security as this was meant just as a comparison. It was already late at night when I received two offers, one after another. This was probably a pure coincidence. I discussed both offers and chose to go with the better one. I totally forgot about the second post I made in another group I knew nothing about. I was quite tired, it was late and I was carried by a seemingly good offer and made a huge mistake.

I made a deal with a seller named “[edited]” (Editor’s note: The seller has been impersonated in the channel by exchanging an O (letter) with a 0 (number) ). We contacted an escrow and administrator “Dmittri W.” We agreed that I send my money to the escrow and when he confirms the transaction the seller does the same and he sends me the money. Another coincidence was that there were problems with the blockchain involved in this trade so my transaction didn’t go through. As if someone was trying to prevent me to make a mistake. But I didn’t listen to my guardian angel and somehow forced this transaction which got stuck anyways. So we agreed to wait and go to sleep and finish the deal in the morning. Before I went to bed I checked one more time and the transaction went through but no one responded as they were probably already sleeping. I went to bed with a very bad feeling and I just hoped everything will turn out ok. At this time my intuition already tried to tell me that I did something wrong. No one responded in the morning. And soon I just heard three message alarms one after another. Even before I have looked at my phone I already knew what has happened. The buyer and the seller left the conversation and the chatroom was gone. So was my money. And there was nothing I could do about it as I realized I made a deal with some guys from this OTC group I knew nothing about. Another thing I realized was that I was tricked and robbed by one person as only one person could delete those conversations in a second. The worst part was that I could check the scammer’s wallet and I could see my money but could not touch it. This was a torment for my stupid deed.

I want to post the NEO wallet addresses of a seller and an escrow. That might help you not to get robbed by this scammer(s). 

“Escrow” Dmittri W … @Dmittri1986 NEO address … AHBWHizMAi43vfDGeZDbdcqDoCFUmY3YjM

Seller “[edited]” (Editor’s note: The seller has been impersonated in the channel by exchanging an O (letter) with a 0 (number) ) NEO address … AMCXsBcQHn7vQ8GoS8fHAbALFBkEJfYBAp

I have found one other article dealing with the same name and address but I don’t have the permission to include that information yet. I followed the transactions from this addresses and the money goes through one particular big exchange and there are very large assets on that wallet. I also believe that this scammer steals the identities of other people and uses them to betray people. Please be aware that those people mentioned in this article, if they are real, are probably not involved and don’t even know about this scam.

All that I wrote above influenced on my decision to make a trade in which I got scammed. There was this wish to go into the unknown field of cryptocurrency market, to learn to trade via OTC but mainly there were those bad factors that drove my decision. Opportunism, lust, and greed. Now, that I know.
I was tired and careless and acted stupidly. I am writing this in a detail because I believe that such scenarios are very common. Maybe not all the factors involved or the same type of trade but some segments for sure. You should always check things so many times as necessary that you are sure what you are doing. Don’t get greedy and don’t chase opportunities that are long gone.

I am in the crypto market for more than a year, I am not dealing with large assets, I find blockchain technology something that will co-shape the future and I take trading as an interesting experience from which I can get much more than just money at the end. I will miss the money that was stolen from me and that I’ll probably never see again. This is one mistake I will never forget and one opportunity to make a change for myself and for everybody else.

Please be careful and enjoy yourself while trading!

p.s.
You can contact me via Telegram…my username is @samurai007

References
1. https://www.finder.com/otc-cryptocurrency-trading
2. https://www.ccn.com/otc-is-much-larger-than-bitcoin-exchange-volume-where-real-whales-trade/
3. https://www.investopedia.com
4. https://www.coindesk.com/bitcoin-brokers-trade-millions-without-exchange/
5. https://news.bitcoin.com/9-million-day-lost-cryptocurrency-scams/
6. https://hackernoon.com/the-6-costliest-mistakes-people-make-when-trading-bitcoin-otc-d975d4acda25

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9 Comments

  1. Hey all! Dear Utkarsh I am very glad that you responded to my article and believe me I know how you feel as you were also scammed by those thives. Your identity was stolen. I wrote in the article that I believe you probably don’t even know about all this. And you just confirmed what I thaught. As Steve already noticed you don’t have the exact same username as the scammer as there is O instead of 0. I am very sorry that this happened to you and I appologise to you if you were offended by my article. But now you know and you can do something about it like I did. Can you even imagine how many peolple were scammed by this guy and many identities were stolen. This guy stole a lot of money and hurt hundreds of people. And we must do something about it or nobody else will. There is also a guy that was robbed by this Dmittri W. You can find his article on reddit….he is also trying to do all he can to catch this guy or this group. We will make sure that it is noticeable in the article that you personaly didn’t have anything to do with this robbery but you are involved as your identity was stolen.

  2. anyone who have doubt, can confirm with @KigKog with my username @utkarsh156013 .. and the deal was successful… this is the only person which i have used for my otc deal.. i have done a single otc deal in otc groups… don’t mention my name afterwards, and delete this wrong post or edit with right info… Have a nice day..

  3. i have gone through the account @Dmittri1986 as u provided, i dont even know he’s which group’s admin.. i do have only 1 mutual group with that person is ”Arweave”..and i never had chat with this person.. i can post the proofs like screenshots… but here is no picture attachment facility.. so first of all confirm the account which robbed u… and then post anything.. don’r blame anyone without knowing all the things..

    • Dear Utkarsh,

      thank you for your message. I notified the author of this post, so he can leave his statement.
      You might have become a victim of impersonation, let’s wait for his proof. You can upload images to imgur for example and post the link here.

  4. Heyy,, i’m here.. Utkarsh … the person whom u introduced in your article.. first of all, i don’t know who are u and why r u doing this… it’s not my neo address and i didnt had conversation with u anytime.. u have posted the screenshots of chats in the groups not the screenshot of my account with including @utkarsh156013…anyone can use my name Utkarsh Surse as lable..

May we have your thoughts, please?