Winstex Ethereum Scam

Have you ever heard of the Winstex Ethereum scam? If you aren’t one of the Winstex victims, you most likely haven’t heard of it. Whenever people tell you about their crypto investments, they will tell you how extremely well all their investments are doing. No one has ever made a bad crypto investment. At the most, their investment might have lost some value because of the volatile market (but they will make it back, and more, as soon as the bear market turns to bull market).

Being one of the few people in the world who made some bad decisions and fell for an investment scam (or at least one of the few who admits to it), I will tell you my story.

According to etherscan.io, the Winstex smart contract was submitted for verification on February 4th 2020, and most likely it was at the planning stage sometime before that.

The Winstex (WIN) Airdrop

In early February 2020 Winstex baited potential investors with an airdrop that would give every user 1500 WIN once they have registered and verified their email. Once the users had passed the KYC, another 1500 WIN would be added to their account, and yet another 1000 WIN for every new investor recruited. At the time Winstex claimed that their token was worth $0.01, and that the token would raise 1% in value for every 100,000 WIN that was released to the community.

Basically, Winstex claimed to give away $30 to everyone who signed up, verified their email and passed the KYC over the whole month of February 2020. A lot of people signed up because of this, and so did I.

Winstex (WIN) in my wallet — I still have some WIN in my wallet

The Winstex Community

Early on Winstex appointed high stake investors to what they called “Global Leaders” and had them create Telegram groups for whichever region they resided in. In hindsight it was a smart thing for them to do. Once the scam was a fact, the only people available to complain to was inestors themselves and not only didn’t have any answers but were vitims themselves.

Winstex Telegram groups — A lot of the Telegram groups are still active, but are used for other purposes.

The Winstex Team

Out of the ten leading people at Winstex I personally only ever saw and interacted with one, Mark Willson. On a few occasions, he held video conferences for investors. The conferences didn’t give any answers, or rather they gave the answers the investors wanted to hear.

To administer their website, KYC process and to manually manage the WIN rewards as well as withdrawals Winstex hired people from (what I assume is) southeast Asia. When investors started to get suspicious, these people didn’t have any answers either, of course.

The Scam

Every investor had to invest a minimum of one Ethereum (ETH), which would give a ROI of 3% every 10th day.

Your level of investment decided how much WIN and ETH you would get every 10 days.

I started investing 1 ETH because I wanted to test their system and make sure withdrawals and things like that were working as they claimed. I can’t recall exactly for how long I tried until I invested more. And for maybe 2 month I got 0.03 ETH and 25 WIN every 10th day, and the only issues I had with withdrawals was that they were a bit slow because it was all handled manually.

I guess I should count myself lucky, as I only invested 4 ETH. After I had tested their system and withdrawals for about two months or so. However, at the times I was a full time student and 4 ETH was a lot of money for me.

Furthermore, Winstex had a type of affiliate system, giving investors a certain percentage of what their referrals invested,

The Epiphany

This was the ETH address of one of the people Winstex had hired to manage their website, WIN and ETH rewards. The last transaction made from that address was 950 days ago, sending 3000 WIN to my address. That was at April 13 2020, and the WIN was part of a bonus I recieved. It would take maybe 2 more months before investors (at least for me) started getting nervous.

It all started with our 2FA was disabled so that we couldn’t log in. I managed to get my 2FA reset once, close to when it was first disabled. As soon as I was able to log in to their website I requested a withdrawal of all the funds I could, which was 70% of the ETH I had invested.

Shortly after I put in the request to withdraw my funds, my 2FA was disabled again. This time I could not reset it. By now I started to doubt I would ever see my ETH again, but I kept hoping. About two weeks later I finally gave up and had to admit to myself that I had fallen for a scam. The Telegram groups were boiling over with angry people who lost a lot more money than I had.

The Aftermath

Since then I have done a few Google searches trying to find out if there was any chance at all to get back some of my ETH. To my surprise I noticed that despise a lot of people losing a LOT of money, I could find very little information online. You would think that (especially high stake investors) would have written about this somewhere. To warn others, if for no other reason. But I haven’t been able to find anything at all about this scam, and it’s probably around 1.5 years ago I first thought I would write this article.

But things have come between, and I have had other excuses or “reasons” to put it off. Because of this scam, I got curious about smart contracts and blockchain tech. I wanted to understand how the scam was done, in part to protect myself from future scams and in part because I’m just a curious person who enjoy learning new things.

When I started to learn about blockchain and smart contracts, I found out that it wasn’t as easy as I thought. There is plenty of information on the internet, but the available information was not aimed at people like me. People who had no previous knowledge whatsoever about blockchain and smart contracts etc.

I had to learn by trial and error, a lot of research and asking stupid questions on forums. That’s when I decided to take what I’ve learned and dumb it down enough so that if I had found “my guides” back then, I wouldn’t have to look anywhere else.

The more you know, the better protected you are.

If you are interested in how smart contracts work, how to build your own Token or maybe how to verify a smart contract – you should check out my guides: https://creepybits.bet/smart-contracts