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Crypto Trading 'School' and Fake Exchange Defraud Investor of $860K

Crypto Trading 'School' and Fake Exchange Defraud Investor of $860K

A Florida investor has filed a lawsuit alleging he was defrauded out of $860,000 in a sophisticated cryptocurrency scam involving a Denver-based trading "school" and a fabricated crypto exchange. The scheme, which promised substantial profits through signal trading, ultimately led to the investor losing a significant sum.

The Deceptive Lure of Signal Trading

Brian Firestone, the plaintiff, claims he was initially approached in December by John Smith, who purported to represent the Alpha Stock Investment Training Center (ASITC). Smith offered to teach cryptocurrency trading and provided Firestone with $500 to begin. ASITC, whose website is now defunct, directed users to trade on CoinBridge Partners, an exchange that Firestone alleges was entirely fake.

ASITC employed a method known as signal trading, where "professors" would send precise trade instructions to participants. Firestone's initial $500 investment rapidly grew to $55,000, prompting him to invest an additional $50,000. His account balance on CoinBridge Partners reportedly soared to $2 million.

The Unraveling of the Scam

The illusion of success began to crumble after a reported losing trade brought Firestone's balance down to $12,000. He then wired $470,000 in cash and took a $330,000 loan from ASITC to continue trading. His CoinBridge account balance purportedly jumped to $24.5 million, but a subsequent trade in USDT on March 9 failed to execute.

Firestone was informed that a "system error" had caused the glitch and erased his balance. Two days later, he borrowed another $1 million from ASITC, bringing his account to $6.6 million. However, when he was unable to repay a portion of the loan, ASITC allegedly shut down his account on May 1.

Firestone's lawsuit accuses ASITC, CoinBridge, John Smith, and ASITC founder Raymond Torres of fraud, theft, and racketeering. It's important to note that the legitimate Coinbridge Partners in Wyoming has denied any connection to this alleged scam.

This incident highlights a growing trend in crypto-related crime, where the focus is shifting from code-based hacks to targeting user behavior through sophisticated social engineering and fraudulent schemes. In 2024 alone, phishing attacks accounted for over $1 billion in losses across nearly 300 incidents, making it the most damaging method of attack in the crypto space.

Key Takeaways

  • A Florida investor lost $860,000 in a crypto scam involving a fake trading school and exchange.
  • The scam utilized "signal trading" to create an illusion of significant profits.
  • The lawsuit names Alpha Stock Investment Training Center (ASITC), CoinBridge Partners, John Smith, and Raymond Torres.
  • The incident underscores the increasing prevalence of user-behavior-targeted crypto scams, such as phishing and fraudulent investment schemes.

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