Russian YouTube Gang Stealing $1 Billion/Year With Fraudulent Crypto Livestreams

A year ago I wrote about how crypto giveaway livestream scammers on YouTube stand to earn up to $1 billion a year from fraudulent videos. It looks like I was right, and this is corroborated by an outside source.

Analysts at Whale Alert say giveaway scammer wallets they track show profits of:

• $98m in 2021

• $30m so far this year

Note, this is just the addresses they were able to track. The $1 billion figure does not seem so implausible when one includes untracked addresses, given that this scam runs continuously, 24-7.

This seems unbelievable, a billion dollars…from videos? Not hacking, not dark markets, not ransomware, not rug pulls, not shitcoins...but giveaway videos that impersonate Elon Musk, Cathie Wood, or Michael Saylor? Yes, believe it.

A single scam YouTube video that earns $.5-1 million of ETH, BTC, and Doge is equal to a single rug pull project (another scam video made $400k in 4 hours). Note, these are just the ones that got some coverage. Most fly under radar. Yet unlike the rug pull, it happens daily, over and over, and nothing is done about it. No action by the feds, no media coverage, no victims coming forward, nothing. The SEC and the FBI have acknowledged that rugs pulls are a problem and have taken action in investigating them, but the same cannot be said for livestream videos.

It’s amazing how many victims there are when you look at the wallets. Everyone is in disbelief when I tell them how much this scam earns, until I show them the Bitcoin and Ethereum wallets. '“It’s fake,” they try to reason “They are sending to themselves”. No it’s not, because at least 90% of the transactions trace to Coinbase. These are Coinbase customers being defrauded. Americans are being scammed a $billion/year to fund Russians, which is not an insignificant even on the geo-macro scale (enough to buy a dozen new fighter jets). Given the ongoing situation in Ukraine, Americans are funding an adversary, all while YouTube stands by and fails to delete the videos until after the scammers have earned a lot and make new videos. It’s like instead of donating to Ukraine, people are donating to Russia.

It’s a never-ending supply or assembly line of videos, victims, hacked channels, etc. It goes on everyday, for 3 or so years now, without any end.

Unlike rug pulls and ransomware, the major benefit of this scam from the perspective of the scammers is it flies under the radar, and is ignored by feds, lawmakers, or the media. Except for headlines which come up occasionally of famous people having their YouTube accounts hacked and repurposed to promote fraudulent giveaways, no one cares that much. Yet this scam earns way more than ransomware or rug pulls. For example, $1 billion is in the ballpark of how much mastermind conman ‘SBF’ of the defunct FTX exchange allegedly stole, but obviously way more media attention about that.

But to YouTube’s defense, the fraudulent videos do get deleted, usually within a couple hours. Or they get algorithmically demoted and people stop seeing them. Or the channels get terminated, obviously at a great inconvenience to whoever has been hacked. So YouTube is aware of the problem and is trying to stop it. It’s worth noting that many individuals are running this scam, but as far as I know based on my own independent forthcoming investigation, just a handful of individuals/entities are successful and constitute the bulk of the earnings, with most videos and scammers earning nothing or peanuts. But those who are successful earn so much.

This low success rate is due to the complexity of the YouTube algorithm, and YouTube’s ongoing efforts, however lacking or insufficient, to stop the scammers. For videos to earn a lot, they must be promoted; otherwise they may only get 0-3 transactions/day, not dozens. The specific scam ring I have been following, including the infamous “.io scammer” in particular (named after his/its penchant for using .io domain names), does not have this problem and its videos always get promoted and earn a lot (such as the aforementioned link https://2023tesla.io ). (The “.net scammer” on Twitter, documented last year, has been decommissioned since Elon’s buyout of Twitter, to be discussed later.)

Today the .io scammer has 3 new video running, below:

A new website: https://tsladoge.io/

https://www.youtube.com/watch?v=iHQ1uUikW2U

https://www.youtube.com/watch?v=7RG29nj0PJQ

https://www.youtube.com/watch?v=RnBRmIiexNw

Checking the BTC wallet showed it earned over 1.25 BTC, a figure which will surely grow as the day goes on, and there will be new wallets, websites, and videos tomorrow. Another wallet shows .75 BTC from x2spacex.io, all in the span of 6 hours today. There are also doge and eth wallet.

But given that these are almost exclusively Coinbase victims, Coinbase bears some accountability and needs to do more about this. One way would be a disclaimer/warning users to not to send to giveaway videos. Or by aggressively blocking the addresses. In the US, it’s time for lawmakers to single out giveaway scams, like any other form of major organized crime, such as insider trading or narcotics. And implore YouTube treat it as a form of organized crime, not just an inconvenience.

If not for crypto or Coinbase, fraudulent livestreams would hardly be as lucrative. Making a livestream about sham weight loss pills is not going to earn $500,000 in a day, when you got Coinbase users with 1 BTC or more ready to send. This is why YouTube will never be successful at stopping the scam when the scam earns so damn much, is so profitable, and people are so gullible. This creates an obvious financial incentive for the scammers invest considerable time and effort to stay a step ahead of YouTube, such as special software to create artificial live views.

Crypto changes the con game completely. The size of crypto is $1 trillion, bigger than pharma, casinos, credit reports, etc. Crypto makes online fraud, which was already profitable, many magnitudes more so, just owing to crypto’s huge size and mainstream penetration (thanks to Coinbase). Pre-crypto, especially pre-Coinbase, good luck finding a con where you have millions of unsuspecting victims just waiting to send thousands of dollars in the promise of quick riches, which by the mathematical properties of cryptocurrencies, cannot be revoked/recovered.

Drugs, porn, casinos seldom exceeds the $1,000 range per customer/victim, but transactions of $10,000 or more are not uncommon with crypto (including $1.1 million sent to a fraudulent Saylor video in January 2022). This is 401k-sized sums of money, not beer money or play money. People are giving their life savings to these conmen, at the click of a button. Until lawmakers, regulators, and federal investigators treat it as a form of organized crime and not just a consumer or civil matter, the problem will continue.