A NOVICE crypto trader has revealed how he was scammed out of £176,000 in life savings after being duped by a stranger who texted him out of the blue.

The pair struck up a friendship after she texted him out of the blue, asking if he worked at her local animal shelter, as she wanted to adopt a dog.

As chance would have it, her victim happened to also work in an animal shelter and they hit off.

The woman spoke to him in length about crypto trading and despite his curiosity, he did not show any interest.

"We kept talking for many hours every day about many things, and one of the things she was very excited about was some new crypto currency that she thought will be the next bitcoin," he told Reddit.

"I had always been thinking about investing in crypto, but knew very little about it and told her I wasn't interested, but she didn't seem to mind at all and we just kept talking about other things."

Crypto currencies are unregulated and do not answer to any financial authority, to which you could turn to, in the case of a large-scale scam.

Due to the anonymity and secrecy of the coins, it's also extremely hard to track where your money goes, further complicating scam investigations.

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It is also incredibly volatile because they are very young markets and it's not uncommon for the price to experience wild swings within a day or even within minutes making it very a dangerous venture.

Over time, the woman revealed that her coins were growing exponentially to her new friend, with him finally deciding he fancied his chances.

"As time went on she showed me screenshots of her currency and how much it was rising, so I asked her to help me just learn and start investing in the standard crypto currencies," he said.

The woman showed him her tricks and got him to make an account on the website of the currency she was using, with him beginning to pour money from his£176,000 savings.

"She helped me with every step for many hours, and eventually I invested ~10k in the standard currencies like ADA, ETH, etc."

"I started with investing just $5k, and over time I trusted her more I invested more, eventually up to about $70k. Everything seemed to go very well and (it seemed like) I made a ton of money.

"Per her recommendation, we would hold the currency until it was about to go public and then take our profits. We talked about how we would have a lot of money and also be able to help many people and animals with that money."

In an attempt to prove herself trustworthy, the scammer introduced her victim to a new currency where there could only be one investor with access to the account, which she bestowed on him.

She even trusted him with £293,000 to invest into the account, with him adding £51,000 of his own money as well.

5 risks of crypto investments

THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.

• Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements. 
• Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
• Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market. 
• Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.  
• Marketing materials: Firms may overstate the returns of products or understate the risks involved.

"She really gained my trust by trusting me to handle hundreds of thousands of dollars worth of her money, so I thought surely she couldn’t be scamming me either," he explained.

Three months after they met, the first account which she helped him with declared it was going public, she said, with it then being time for them to cash in their profits.

She sent her victim a screenshot of her account, with millions of dollars in USD waiting for her in real money.

But the man's cash out was not as simple. It took him and a week and it demanded that he put in more money in order to cash out.

"When I finally moved my funds into the new currency's account, it wouldn't let me unlock it, and she told me the website had changed the rules and I needed to put in a lot more money now," he explained.

"I did not have more money though, and I told her that, and I tried to withdraw some of my $100,000 USDT out of this website, but it did not let me."

To his horror, he subsequently saw both crypto websites go down – his friend assured him that she'd help recover the funds.

But he never heard from her again with him being scammed out of his life savings "by his best friend".

Eventually he was able to track £70,000 down to find it had gone to a "random address" address shortly after the website went down.

He said: "I know it seems that I was very stupid and gullible, but I am just feeling lost now and I don't know what to do."

A moderator from Reddit, familiar with the scam known as "pig butchering" urged Redditors to be wary of the ploy which is becoming increasingly common in the crypto community.

I know it seems that I was very stupid and gullible, but I am just feeling lost now and I don't know what to do.

"Sometimes the scam begins with a romance scammer who claims that they can help the victim invest in cryptocurrency.

"Victims are told to buy cryptocurrency of some kind using a legitimate cryptocurrency exchange, and then they are told to send their cryptocurrency to a website wallet address where it will be invested.

"Sometimes the scam begins with a notice that the victim won cryptocurrency on some website, in this case messages will often be sent through Discord.

"In either case, the scammer controls the website, so they make it look like there is money in the victim’s account on their website.

"Then the scammer (or the scammer pretending to be someone official who is associated with the website) tells the victim that they have to put more money into the website before they can get their money out of the website.

"Of course all of the money sent by the victim has gone directly into the scammer’s wallet, and any additional money sent by the victim to retrieve their money from the website will also go directly into the scammer’s wallet, and all of the information about money being held by the website was totally fake.

"This scam is also known as the "pig butchering" scam and fake cryptocurrency websites and apps controlled by scammers are becoming more and more common."

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