Is this a Bitcoin scam?

Question

Someone wants to e-mail me a check, take the check to my credit union's ATM, deposit it, withdraw a smaller amount in cash, and use the cash to buy Bitcoin to send to him.

Is this a scam?

Answer 1

Yes, it’s a scam. After you have irrevocably paid him the Bitcoin, the check will turn out to be invalid and you’ll have to pay the money back to your bank. You might also come under investigation for money laundering.

Answer 2

They're basically asking you to act as a Bitcoin exchange.

Now if someone asked you to act as a bank, would you do it? Probably not, because you know there are special rules that banks have to follow and it’s better for the other person to just go to an actual bank – unless, of course, they are up to no good.

This all applies to other financial institutions too, including Bitcoin exchanges. So yes, you can safely assume this is a scam.

Answer 3

Why would anyone wanting to buy Bitcoin need to jump through so many elaborate hoops?

So here is the chain of actions you are being asked to partake in:

• “Someone wants to e-mail me a check…”
• “…take the check to my credit union's ATM, deposit it…”
• “…withdraw a smaller amount in cash…”
• “…and use the cash to buy Bitcoin to send to him.”

As a general rule of thumb, pretty much all legitimate economic transactions are just about two very simple steps:

• Someone wants something and finds out the cost of that item.
• They pay for that item and receive that item.

And that’s that.

An economy can be summed up as follows:

 “Why would one person you don’t know do something for another person they don’t know.”

And money is typically the reason and the amount of money is typically the variable.

Knowing that, if there is more than one step in a financial transaction it is fishy. If it comes from someone you barely know, even more fishy. If you cannot understand why you would do that, it is extremely fishy. If all of that happens at once, it is a scam.

In this case you need to ask the following about each step:

• “Someone wants to e-mail me a check…”: Why would they send you a check in this age of digital transactions? Why not send you money via PayPal or Venmo. There are still risks associate with electronic transactions, but still if someone genuinely needed you to do something they would send you the money in other forms other than a check.
• “…take the check to my credit union's ATM, deposit it…”: Why do they need you to do this? Why can’t they just purchase Bitcoin on their own?
• “…withdraw a smaller amount in cash…”: Why do they want you to deposit a check of one amount yet ask you to take out a smaller amount? Why are they being so elusive about this? Why not say — for example — “I will send you $2,000 via PayPal or Venmo. Keep $100 for yourself as a fee and get $1,900 in Bitcoin for me…” That still sounds fishy but at least you will get paid a fee in a clear way and the finances are sent in a legitimate way. In normal transactions, you do not get paid a larger fee than the core transaction. Why a “smaller amount?”
• “…and use the cash to buy Bitcoin to send to him.”: Why are they asking you to go from check to your bank to a lesser amount of cash to Bitcoin? Why don’t they just purchase Bitcoin on their own?

The fact they are creating an elaborate chain for a simple transaction means this is a scam. The fact they want you to deposit a check and take out less money makes no sense: In normal transactions, you do not get paid a larger fee than the core transaction. Why a “smaller amount?”

The scam is simply they will send you a rubber check, the funds will be available to you immediately, you think you have that money, you will withdraw cash and buy an untraceable currency. And then — when the check finally bounces — the check deposit amount is reversed and whatever amount of Bitcoin you bought, you will be on the hook for.

Meaning when the dust settles, you will lose money but this other person will gain “free” Bitcoin they have now stolen from you.

Answer 4

100% a scam. This is how it works.

1. Of course the scammer will be very gentle and he will tell you, to wait for the cheque prior sending him bitcoin. He is building trust.

2. He will send the cheque - he will also take a photo of it. Eventually you will get the cheque, and you will go to the bank / ATM and deposit what looks like a legitimate cheque. It probably can be a stolen cheque book.

3. The transaction goes smooth, and you go home happy and send bitcoin to your new friend. - the scammer. This crypto is lost forever and no way to return it. Scammer 1 vs 0 You.

4. Here is the trick. You deposited the cheque, but the money is NOT there yet. An international cheque has to be CLEARED by banks and this takes 3 to 4 weeks or more. Your bank balance will never grow. The cheque will eventually bounce, will not be cashed for many reasons - stolen cheque book, blocked account, fake cheque and hundreds of other reasons. In simple terms - you will NEVER GET THE MONEY. The cheque is NOT legitimate

5. At some points, you will get a call from the bank - telling you that the cheque has not been honoured. Even worse you will lose more money since you will be charged (most banks) since you have deposited a bounced cheque. You may also end up questioned by the police. Scammer 2 vs 0 You.

Never think that in today's world there is anyone willing to give money for free.

If you want to play a game on the scammer, go along with him, ask him to send you the cheque and go to the police with it. Tell him that you will only send bitcoin when the cheque has cleared. Learn how they twist the story, how persuasive they can be. But probably won't speak to you anymore after telling them that you will wait for the cheque to clear first.