Aurora Labs CEO describes “fascinating and devious” crypto scam he almost fell for

Aurora Labs CEO describes “fascinating and devious” crypto scam he almost fell for

Aurora Labs’ chief product officer, Matt Henderson, says there’s a sophisticated over-the-counter (OTC) transaction scam going on that nearly tricked him into losing a stash of his hard-earned cryptocurrency.

Henderson told his Twitter followers on Friday about his personal encounter with a scammer known as Olai.

Olai’s fraud essentially involves tricking a victim into believing that payment was received for an OTC crypto transaction, when in fact it was not.

How it worked

Henderson explained that the crypto scam began when Olai contacted him on the Telegram messaging app and asked about purchasing AURORA tokens with USD Coin (USDC).

The pair agreed to complete the transaction via escrow, a common strategy where a trusted neutral third party holds assets on both sides of the transaction and releases them to the counterparty when payment terms are met.

In this case, Henderson chose Aurora Labs’ head of security, Frank Braun, to serve as the escrow agent, whom he initially referred to as Steve in the Twitter thread.

However, Henderson caught wind of something fishy when his escrow partner shared a screenshot of him allegedly giving the go-ahead to release the entire amount of AURORA tokens to the buyer.

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According to Henderson, the scammers replicated his Discord profile and asked Braun to release his AURORA balance to the scammers.

Discord’s blocking feature ensured that Henderson was unaware that his profile had been cloned and that scammers were impersonating him.

After escaping the scam, Henderson later unpacked the details of the scheme, warning anyone trading crypto through OTC funds to take extreme caution and avoid falling victim to the sophisticated scheme.

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He also shared that the scammer named Olai may still be active in the community as a person using a similar name and tactics has been spotted on Telegram, according to Twitter user Scott Yeager:

“How curious… I was recently contacted by an Olai Olsen on Telegram trying to initiate an OTC deal and offer USDC. Same grade?”

Earlier this year, the US Federal Trade Commission found that nearly half of all crypto-related fraud will originate from social media platforms by 2021.

In a report in June, the FTC reported that as much as $1 billion in crypto was lost to fraudsters during the year, more than a fivefold increase from 2020.