Nick Yeomans and his wife Josie thought they had hit the jackpot when a Bitcoin investment they made tripled in six months.
To the amateur investors, the cryptocurrency trader they had found, Coinexx.org, seemed too good to be true.
Slowly, they poured more money into their account, and were met with greater returns. They convinced a family member to match their investment of more than $20,000.
But once they had no more money to give, their fees grew, their returns shrunk, and roadblocks were placed between them and their money.
Then they got a message.
“Let me save you the stress, cus (sic.) you’ve been through a lot already. Coinexx is a scam. Everything and everyone involved are the same,” it said.
“Don’t bother about trying to get back your money. Just focus on getting money to take care of your family.”
Immediately afterwards the company ceased all communication with them.
“I doubled over and I just felt sick. I was like, ‘We’re f—ed’. That’s it. That’s all I thought,” Mr Yeomans said.
“We’re left here with nothing, with no income, and with lots of debt. The debt has high interest. I thought ‘How are we going to get out of this?’
“I just wanted to cry.”
The Canberra couple is among a growing number of Australians falling victim to investment scams lurking behind the volatile cryptocurrency market.
According to the Australian Competition and Consumer Commission (ACCC)’s Scamwatch, investment scams involving Bitcoin and other cryptocurrencies have increased markedly in 2019.
By May 31 Australians had reported more losses to investment scams mentioning cryptocurrency than they had for all of 2018.
Everything seemed fine at first
Mr Yeomans said he was initially sceptical when introduced to Coinexx.org (not to be confused with Coinexx.com) through a Facebook group.
He decided to risk money on what he was “expecting to be a scam”.
But, to his surprise, Coinexx took a $1400 payment and delivered more than $3700 within six months.
After creating an account, Mr Yeomans was given a log-in to the company’s website, where he could ostensibly monitor his investment’s growth.
While at first glance the website appears legitimate, closer inspection raises red flags – pricing plans contain grammatical errors, and the small investment company lists the building that houses the London Aquarium as its headquarters.
But over several months the couple became reliant on payments from the company, Mr Yeomans quit his job, and they restructured their finances around Coinexx.
“From previous experience and what you expect to see or recognise as a scam, a lot of things weren’t there,” Ms Hamill Yeomans said.
“I really didn’t expect it to happen for such a long period of time.
“In terms of energy, just putting so much into it. Having the energy to speak to you every day, let you know what’s going on, especially when nothing really is going on. It’s such an incredible amount of detail to go into.”
‘It’s hard to believe it’s a scam if they’re paying you’
As it turned out, the Yeomans family were likely caught up in one of the oldest scams in the book: The Ponzi scheme.
“The description of the scam and text message exchange provided by the victims have the appearance of a Ponzi scheme,” a spokeswoman for the ACCC said.
She said the ACCC had received no complaints about Coinexx.org.
Instead of taking their money and increasing it legitimately by trading Bitcoin, Coinexx.org instead would likely have paid them a share of other people’s investments.
“They build up trust by doing the right thing – by keeping their word up to that point, but it was just such a long period of time,” Mr Yeomans said.
It’s hard to believe that it is a scam if they’re paying you.’’
Like many similar schemes, Coinexx.org’s account manager encouraged them to join up friends and family members, with the goal of sourcing more money to flow through the scam.
But the couple said, to them, it appeared as though an emerging business was simply trying to generate more customers.
“We were living this lifestyle, that this investment had given us, of course, why wouldn’t you want to be able to share that?” Mr Yeomans said.
Once the couple was bled dry, the scam stung
The couple and a family member had invested more than $43,000 with Coinexx.org, and become reliant on its payments by the time they were suddenly blocked from their money.
It started with a request for an additional withdrawal fee “to comply with regulations”.
“It all sounded above board. They said ‘so that we can comply with the law’, and I thought ‘that sounds fine, you’re complying with the law, I respect that’,” Mr Yeomans said.
The couple, having already sunk their savings into the investment, took out a loan, believing they could pay it back instantly once the fee was paid.
It was the first of several excuses provided by Coinexx.org, and the first of several requests for additional payment – many of which were met.
“When it has become your main source of income, and it’s been so reliable as well, you’re just trying to think of how you can solve this problem that you’re faced with, because you’re trying to provide for your family. You’re just trying to secure your income,” Ms Hamill Yeomans said.
By the time they learned they had been sucked into a scam, the family had sold possessions, were behind on their rent and bills, and taken out short-term loans.
They were notified of the scam after the couple sent an email, begging for their funds to be released.
“She sent me a message and said look, ‘I just want to save you the stress, this whole thing’s a scam, you’ve been scammed, you’re not getting your money back, just try and look after your family’,” Mr Yeomans said.
It’s not just the money that we lost … it’s the whole future that we had built on this thing.’’
“We were building our business, we were expanding, everything was looking really good. It was looking like we were going to be able to take our family on a trip to Japan, and we were going to be able to be self-employed and be able to provide an abundant life for our kids.
“That whole future collapsed.”
The ABC contacted the WhatsApp accounts the Yeomans family dealt with, but did not receive a response. One of the scammers deleted Coinexx branding from their profile after being contacted.
Mr Yeomans said he and his wife had since taken moves to get back on their feet financially.
“We don’t have time to feel sorry for ourselves. We’ve got other people relying on us. We’ve just got to get to work,” he said.
“So that’s what we did.”