OMG, I fell for a crypto scam, and my crypto portfolio got burned!
I lost over 10 ETH to a sophisticated copy trade scam on Discord, which I’m calling a devastating fire—kind of like how a forest fire wipes out a forest. I didn’t catch the deception until it was too late.
It was a painful experience and left me feeling ashamed and embarrassed. How could this happen to me?! I know to be watchful for scams.
How fire burned my crypto.
The scammer pretended to be the lead trader from a trading program I recently joined. The program included courses and a Discord community.
The scammer’s Discord username and profile picture were exactly the same as the real guy…well, not exactly.
It was different by a period—a single dot in front of the username. I honestly thought that .username was the correct spelling for my trading course instructor, but it wasn’t. The scammer welcomed me to the traders’ Discord community with friendly open arms, and the conversation that followed was so convincing that he was the actual guy that I didn’t bother to verify that he wasn’t.
Why the hell not?!
Why didn’t I verify? There were some red flags, but for unknown reasons, they didn’t stand out enough for me to pause before sending my ETH.
I’m known in my community for my due diligence and deep dive into security, scams, and all things crypto. So why did I fall for this?
It’s human nature to trust.
I really like the guy teaching my trading course. He’s thoughtful, personable, high-energy, and very positive. Since I thought the scammer was him and the conversation’s energy mimicked the real guy’s thoughtful, high energy, I trusted his recommendation to join the copy trade service only available to Discord community members.
The service supposedly paid 25-45% returns, which also seemed reasonable.
It’s natural to look for an easier way.
Part of the scammer’s reasoning for joining the copy trade service was to save me time and reduce my stress around trading.
Again, this made sense.
Most of the world is stressed, overworked, and sometimes underpaid, so stockpiling supplies for the winter or hard times is a natural survival instinct.
Investing money in a copy trade service where I didn’t have to manage every trade was appealing, as it would help me build my nest egg.
Great idea, wrong application!
Honest copy-trading services do exist! But fake ones do, too.
Unfortunately, I’m not the only crypto trader who has been scammed. Other experienced crypto users have also been scammed or hacked.
On my free consulting calls, I’ve talked with many users who’ve sent large sums of money to fake exchanges only never to be able to withdraw funds.
My heart went out to them, but unfortunately, I could not help them recover funds just like I can’t recover my funds.
Where do I go from here after fire burned my crypto?
At first, I was so upset at myself for falling for a scam that I nearly tore my house apart. Afterward, I felt terrible about scaring my cats and my dog, not to mention my partner.
A day later, I called a good friend of mine who has a much larger crypto portfolio than mine, and he shared that he lost even more ETH than I did on a crypto lending platform that got hacked, and 150+ ETH was lost.
It made me realize our losses are relative.
He could absorb his loss without too much disruption to his life, and I could absorb my loss without too much disruption to my life.
Losing money is frustrating as hell, but as my partner said, it’s not the end of the world.
That was my second big mistake.
My first big mistake occurred when I first got into crypto. In 2015, I bought three bitcoins for $750, then sold one bitcoin for a used laptop. Six months later, I sold it all when the price was about $1,200 each.
That one bitcoin I traded would now be worth over $90,000. Altogether, they would be worth more than $270,000 today!
My point is that we all make mistakes. The question is, how do we recover from them and avoid repeating them?
A second scam attempt.
Believe it or not, the day after I realized I got scammed, I received another direct message on Discord from another well-known crypto analyst whose community I joined on Discord. This new scammer was attempting to coerce me into another copy-trading scam.
Fortunately, I learned from my previous mistake and immediately recognized that my analyst’s Discord username was misspelled.
I deleted that message instantly.
How do I recover after fire burned my crypto?
So, what do I do now? Do I get out of crypto in disgust? Do I quit? Give up?
The thought had occurred to me, especially that first night. I wanted to die; I was so upset. Luckily, I have a devoted, caring partner who reminded me that she loves me for my beautiful heart, not my money.
Gradually, the pain started easing. I didn’t sleep much that night, but after talking with my crypto friend the next day, I started formulating a recovery plan.
What I’m about to share might sound silly and not make sense to some.
But if you’ve read “My Story” on my website blog, you would know that I used to be a Hot Shot wildland firefighter for the Forest Service, and I cruised timber as a forestry technician for many years afterward.
I have an intuitive connection to the forests and trees of the Pacific Northwest.
Rebuilding my portfolio after fire burned my crypto.
I’m treating my loss and this scam as a tragedy, like a forest fire.
The loss of ETH from my portfolio is like the loss of the giant Douglas Fir trees of a mature forest after a massive forest fire.
Once fall rains extinguish the fire and the smoke clears, the scarred and scorched earth is all that is left. Many of the trees are dead, but patches of green with living trees survived and will reseed future generations of forests.
This is where I am right now. My portfolio is scarred and scorched, but it is not dead. My portfolio is like the forest.
The forest isn’t dead; it still holds the promise of life. Come spring, little green things will start growing. I intend to model my portfolio recovery on the recovery of an old-growth forest after a forest fire.
Does that sound silly to you? Stick with me. It will make sense once I explain.
I consider myself a pseudo-expert on old-growth Douglas Fir forests. In the 1990s, I created an education CD-ROM program called The Web of Life of PNW Forests—from Forest Fire to Old Growth. However, due to the Internet’s success, it never made it to the market.
My recovery plan after fire burned my crypto portfolio.
I plan to model my portfolio recovery after the rejuvenation of a forest after suffering a forest fire.
Pre-forest stage: (vaporware in crypto)
After the forest fire, the burned area turns green in the spring after the fire. The ground is filled with herbaceous plants and wildflowers. These tender plants are short-lived and die off quickly, giving way to more woody plants in the next stage.
In this stage, I will focus on trading meme tokens. I equate meme tokens with wildflowers. They don’t last long, but they sure stand out.
I will do my best to take advantage of the meme coin craze, which I expect will be short-lived but beautifully fruitful.
Young forest stage: (middleware in crypto)
Once the wildflowers finish blooming, many shrubs, forbs, and grasses sprout from the underground root structures after a fire. These plants give the forest a low-level structure, holding the soil together so that baby trees can start growing.
In this stage, I will focus on what I’m calling the low-level structure of crypto—those projects that make other dApps function. This would include Layer ones and Oracle tokens.
Mature forest stage: (blue-chips in crypto)
The baby trees growing in the young forest stage keep growing and will eventually get big and tall. It will take time. Some trees are so adapted to fire that they rely upon it to regenerate new stands. Pinecones of some species will not open and release the seed until exposed to the heat of fire. These seeds are nurtured and nourished in the pre-forest and young forest stages.
In this stage, I will focus on growing my mature portfolio, including boosting my blue-chip holdings. The ETH that I lost was part of my blue-chip portfolio. I plan to sell tokens from the first two stages and buy more mature blue-chip tokens, probably BTC and maybe ETH and SOL.
Don’t let fire (scams) burn your portfolio.
The plan I’ve laid out above isn’t linear. These things will most likely happen in tandem. I recently bought some meme coins for the pre-forest stage and already owned some middleware tokens. Plus, I have a decent bag of blue chip coins.
My advice to you and me is to be extra careful with your crypto, especially around those pretending to have your best interest at heart. Arm yourself with knowledge to stay ahead of the scam artists.
The easiest way to make money in crypto is not to lose what you already have.