Firstly I’d like to share my credentials so you can be assured I can speak authoritatively on the subject of cryptocurrency and have enough experience to accurately identify a Ponzi scheme or scam.
I am the Founder and Chief Engineer of NavCoin which is a cryptocurrency that has been publicly traded since 2014. I have been programming cryptocurrencies and blockchain for over 4 years now and I have a total of 10 years experience as a Software Engineer. I have been an invited speaker at multiple international blockchain summits and local corporate events. I am considered one of New Zealand’s foremost industry experts on blockchain technology. But don’t just take my word for it, you can easily look me up on the NavCoin website and you can click through from there to my LinkedIn profile: https://navcoin.org/#team
I’ve seen dozens of crypto scams come and go during my time in the industry and even lost a few dollars to one myself when I was first starting out. This article is quite long, so I’ve put together a summary here;
CWE Trading Bot is promoted by “Crypto World Evolution” and various individuals on social media as an easy way for people who are new to cryptocurrencies to invest and make passive income. They claim the software can earn you double digit daily profits and want you to buy the trading bot software for $500 or $2500 for the pro version. I have spent my weekend investigating this product and the team behind it. All the evidence suggests that Crypto World Evolution is a Ponzi scheme and the CWE Trading Bot software is likely to be programmed to steal your cryptocurrency.
The three main people i was able to associate with the CWE Trading Bot — Ari Maccabi, Tomas Perez and Darren Little — appear to have been previously involved in at least five fraudulent online scams. If you are currently using this software, immediately uninstall it and change your passwords. If you are contacted by anyone promoting the CWE Trading Bot, do not send them money and do not install any software they send you under any circumstances. Immediately report their profile and share this article with as many people as you can to help expose the scam.
The rest of this article will walk you through how I figured this all out, teach you how to easily identify and avoid these types of scams and share with you some basic tips on how to stay safe as a new cryptocurrency investor. If that sounds like something that could be useful to you, keep reading.
This article has spiralled into a bit of a novel simply because I found so many red flags. What’s unsettling is just how many problems I found and I only looked for a few minutes at a fraction of their content. It’s fair to say that this article, long as it may be, is only just scratching the surface.
Let’s get started.
Yesterday, I saw a post on my Facebook news feed asking if anyone was keen to get onboard with a lucrative trading bot. My interest was piqued. My experience tells me it’s almost certainly a scam. Not wanting any my friends to get scammed, I decided to play along and see what I could uncover. To make sure no one got scammed in the mean time I immediately sent private messages to the other people who showed interest in the bot and told them I was pretty sure it’s a scam and that I was going to investigate and confirm it.
There are unfortunately quite a few of these Ponzi schemes around at the moment as opportunistic fraudsters prey on keen but green investors who are trying to get onboard a new technology they don’t fully understand yet. The scammers capitalize on this by sounding just pseudo-technically competent enough to convince new investors their scheme is legitimate, but to someone like me whose been around a few blocks it’s blindingly obvious their scheme is not going to end well.
Keeping investments simple
Disclaimer: I am not a qualified investment advisor and this section is entirely my own opinion.
The bottom line for me is that the safest investment is a simple one. In my experience, the simplest yet safest way to invest in something high risk like crypto is to buy a small amount of a well established currency that has real world use case and is backed by a qualified team who are committed to the project. Any coins which are bought should be withdrawn from the exchange website and stored in a backed up and password protected wallet on your computer. That’s pretty much all there is to it.
Beyond this, there are some legitimate, more advanced ways to invest into cryptocurrencies like futures, margin trading, mining or running masternodes. But as the saying goes, always walk before you run. Simple is best, especially if you’re new to this.
There are some other options which sound good at a glance and promise big returns; lending platforms, investment programmes and automated trading bots. But in reality these can quickly turn into bad investments and many are straight forward scams. The danger of trying to run before you can walk is that it’s easy to mistake a scam for a legitimate investment opportunity. The differences can be subtle to the untrained eye.
If you’re new to crypto, the easiest way to minimise your chances of being the victim of a scam is by not engaging in anything more complicated than a simple buy and hold strategy like I outlined above.
Cryptocurrency Ponzi schemes come in slightly different shapes and sizes but they all largely follow an easily identifiable pattern. One of the bigger and more elaborate ones lately was BitConnect which became so overwhelmingly popular they were holding massive conferences all over the world and had a market cap of over $2 Billion USD. But like all Ponzi schemes, they collapsed eventually and the bigger they get the harder they fall.
On the 16th of January 2018 Bitconnect closed its online “automated (non existent) trading” portal, liquidated all member funds at a 90% loss, vaporised $1.7 Billion USD from their market cap and rolled out an intensive slash and burn campaign deleting most of their content and profiles from YouTube, Facebook and Twitter as fast as humanly possible. It was spectacular. But it also financially ruined a lot of innocent people which is heartbreaking.
In this article I’m going to walk you through this less sophisticated, but still dangerous Ponzi scheme I stumbled upon the CWE Trading Bot. First I will show you the communication I received about the bot and then I’ll walk you through the overwhelming evidence against this being a legitimate and safe investment.
The real aim here is to teach you how to do your own research so you can avoid these things in the future. It’s actually really easy. Most of the red flags which I found were only a few clicks or keystrokes away and are non-technical in nature.
The Initial Facebook Post
I commented “GAINS” on this post and then about 20 minutes later this is the message I was sent by the poster to my inbox on Facebook.
# Start Transcript
< Personal Information Removed > Thank you for connecting and inquiring about more information on what I believe is a solid way to grow your Bitcoin with these incredible CWE Auto Trading Bots!
This is new technology to me and I am not a tech savvy person but I have found this easy to set up the bots to start trading for me 24/7 365 days. There are 2 level entries to get started. The young miner bot license $500 max you can trade is $2500 with 0.01 minimum trading in each bot. The second is the Pro Miner $2500 License can trade up to $10,000. For you big guys you can by several pro miner licenses to trade more than $10,000.
I have included some helpful information for you including fb groups, launch video anda great info cheat sheet. Please add me to your fb group so that as a team we can support each other with a great team culture.
WHO IS THIS FOR: Crypto enthusiast like me, there are even experienced traders using the bots. You don’t need to be an expert on the blockchain! The leaders are always supporting the group and are engaging and answering questions and they are big on compliance. There is a lucrative affiliate program if you want to share with friends and family or recruit and build a team. What I love about this is the money is in your crypto exchange like binance it is not with any 3rd entity. You are the boss! You can withdraw your bitcoin any time. You can pause or stop a bot…this is a no brainer
So don’t ignore this one
You can watch the replay of our original launch at https://youtu.be/MxR0ZFrWSdQ
What level do you want to join at? $500 or $2000? Keep in mind the $2000 bot is fully auto with up to $10K in active trades.
If you are ready send either $510 or $2010 to this wallet: blockchain fees or if etc goes up etc.
< Bitcoin Address Removed >
Once you have send the BTC in please send me proof of the payment sent once it has 2 confirmations along with the following:
1. Full Name
2. Mailing Address with postal code
3. Email address
4. Birth date
5. Mobile Phone Number
6. Username (must be at least 6 digits and no more than 11)
7. City you were born in
8. TX Hash for the payment sent
As soon as we can confirm your payment you will be manually added into the system and placed in the binary. Make sure you have given us all the required information. Once you are in the system, you will get an email with your login. Login and click Tutorials on the left hand side and watch the videos!
JOIN THIS GROUP TO SEE THE RESULTS: https://www.facebook.com/groups/cwelegendsandleaders/
Here is a more in-depth info on the power and potential of our bots
If you would like to start get back to me and I can walk you through the sign up process
Connect with me on
< Personal Information Removed >
PS. There are no affiliate links yet… the signup process is manual. Let’s go!
# End Transcript
It was about what I was expecting, so I started researching the software and anyone I could link to the CWE Trading Bot.
The Warning Signs
Before we even start digging into the content, we can actually debunk the entire premise of this offer with nothing more than simple logic: If these guys really did create a bot which is legitimately capable of returning 39% profit in 24 hours like it said in the image they posted, there is no way they would be trying to sell it to people on Facebook for $500. They would take that golden goose they created, put it in front of a venture capitalist and say;
“My bot can make us 39% profit in 24 hours. It’s legit and i’ll show you how it works. If you put in $100 Million that’s $39 Million profit every single day. I’ll split it with you down the middle and we can each have our own private islands by next Tuesday.”
Even if it just made 1% per day, this logic is correct. This argument should be the end of the debate about all high yield investment programmes and the end of this article. But I’m thorough and I wanted to see what I could dig up on these guys, so let’s go through what they sent me and see what we are able to find out or deduce.
The second image of the Facebook post states the bot has earned 56% profit within 72 hours in a downward trending market which sounds way too good to be true. In my experience, anything in crypto that sounds too good to be true, most definitely is.
The message they sent to my inbox says that it has a “lucrative affiliate program”. Affiliate program, multi level marketing, referral bonuses, however they try and frame it, they’re all just different letters spelling the same words; Ponzi scheme. Virtually every single trading platform, trading bot or mining pool I have ever seen over the years that offers any type of affiliate or referral program has turned out to be a Ponzi scheme and ended up burning investors.
A Ponzi scheme is defined as: “A form of fraud in which belief in the success of a non-existent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.”
The way these things usually work is that it’s an affiliate program combined with some type of sign up fee or buy in cost that forms the main driver of the Ponzi scheme.
The specifics around what the “non-existent enterprise” part of a Ponzi scheme differs from scheme to scheme. It could be a trading bot, an investment program, a meal replacement drink or postal coupons. It doesn’t really matter, but there will pretty much always be an affiliate program and a sign up cost.
Crypto World Evolution is literally cookie cut from this template.
So let’s assume that Crypto World Evolution is a Ponzi scheme, this is how it would probably operate under the hood:
A new member signs up and purchases the trading bot. A small portion of that money is used to pay the referrer their referral bonus. Another portion used to drip feed existing customers fake trading returns to trick them into thinking the system is working and give them the confidence to refer more people. The remainder of the money is then syphoned off by the people who set up the Ponzi scheme. A continual and ever growing number of new members purchasing the trading bot is required to fund the fake investment returns to keep tricking the existing members into thinking the platform works and referring even more people. This is why Ponzi schemes are also often referred to as a pyramid scheme, by necessity the base of new members is required to continually grow to sustain those above it.
To pay for the trading bot software the message asks me to send BTC directly to an address the facebook user has provided which to me is really suspicious. I would advise never sending anyone who offers you an investment opportunity on facebook or any other chat / email platform any money under any circumstance. It’s like the Nigerian Prince email scam from the 90s all over again.
I was surprised there was no link to the trading bot’s website in the info I got sent. They do have a website but there is zero useful information on it which is another red flag. There’s no information how the bot actually works beyond some meaningless buzzwords — “state-of-the-art, exclusive, innovative technology” and “hybrid robot”. There’s also no information about who runs Crypto World Evolution and when I look up the domain name, the owners are hidden behind an anonymous registrar service.
The terms and conditions documents are the only detailed pieces of information on the site and there’s some things in there which confirm their business model is really based around their referral programme — they don’t guarantee you will make any money from trading profits and their only contractual obligation to you in regards to money is paying the referral bonus whenever you sell the trading software to someone.
In regards to their responsibilities (or lack thereof) around the software’s operation there’s actually a pretty frightening clause in there. It says that they’re not responsible for “the consequences of an ISP clicking the YES/ON button on the trading platforms for withdrawing cryptocurrencies”. The ISP is you (Independent Service Provider).
If I were to speculate about why they have this clause in their terms and conditions my first guess is it’s because the trading bot software is possibly malicious. You need to give this software access to manage all your funds on an exchange don’t forget. It’s plausible that when the Ponzi scheme reaches critical mass, the bot software will attempt to withdraw all of your funds from the exchange to the scheme operators. In this scenario, a clause like this intends to give CWE plausible deniability as they blame the withdraw on user error.
The proponents of CWE keep trying to reassure people the bot can’t withdraw your funds and it’s true that most exchange platforms allow you to manage the API permissions and set it to disable withdrawals. Like a lot of the things these guys say there is a sliver of truth to it. However there is simply no way to validate this software isn’t doing malicious things like key-logging your exchange password or wallet encryption passwords. The source code for the bot isn’t publicly published for peer review which is done by nearly every other legitimate project in the cryptocurrency sector.
I haven’t tried the bot, I don’t want to install it on my computer for reasons which I hope are now obvious. It is likely the bot is capable of executing trades on your exchange account, but that doesn’t mean this offering is safe or legitimate by a long shot.
To be honest, connecting any software to your exchange account is risky, but connecting a piece of software that was sent to you by a guy on a facebook chat, which uses undocumented trading strategies, is written by an unknown developer, published by a company you can’t find out anything about which has the legal disclaimer which absolves them if they steal your coins is simply insane. Please never, ever do this.
Despite there being no identifying information on the website itself, the info I received links to a youtube video released by Ari Maccabi. When you Google Ari, the 3rd result is an article about him on RealScam.com entitled “Ari Maccabi — Ponzi Pimp Is His Brand” and a bit further down the search results is a pretty comprehensive post on steemit about his previous Ponzi / Scam activities which date all the way back to 2010.
We’re not off to an encouraging start vetting the people involved with this trading bot software.
In the first few minutes of the video Ari says that the person who owns the company and built this trading bot is a someone called Tomas Perez who he says was previously involved in Bitclub Network.
A quick Google search of Bitclub Network shows that the first page of results includes 3 articles which accuse Bitclub Network of being either a scam or a Ponzi scheme. Like this one for example:
When I look at the Bitclub Network website, there’s no mention of Tomas Perez. In fact, the lack of information about their team and how their product actually works is almost identical to what we found (or didn’t find) on the CWE website.
The facebook group the message linked to has these people listed as the admins:
Ari Maccabi, Madiba Thompson, Darren Little and Norm Yap.
We already Know Ari from the video, so who are these other guys?
A quick search didn’t bring up anything on Madiba Thompson or Norm Yap. Their facebook profiles do have a bunch of seemingly legitimate content posted to them, so I assume they’re at least real people (hopefully).
Searching for Darren Little didn’t bring up any info about him on the first try, but ‘little’ is a common english word so I thought I’d try “ Darren Little scam” and see what came up. Boom, the first hit is a complaints board message from a user which accuses Darren Little and our pal Ari Maccabi of being involved in a previous MLM scam which resulted in the accuser having $5000 stolen from them:
I also found this 18 minute video on Youtube about Ari and Darren which walks you through another scam these guys ran called Jet-Coin just 4 months ago which appears to be pretty much the exact same scam as Crypto World Evolution.
There’s a lot of information online about the Jet-Coin scam if you search for it, one example is this thread on bitcoin talk:
Beware jet-coin.com - scam do not fall for it
Beware jet-coin.com - scam do not fall for it
Beware jet-coin.com - scam do not fall for itbitcointa
Ari seems to try and hide behind this facade of “I’m not part of the company, I’m just a member” which is another common tactic by the people involved in these scams. They seem to think this statement somehow absolves them from being held accountable for perpetuating, promoting and convincing people to invest into a scheme that directly profits them which they are in no uncertain terms aware is fraudulent. Ari’s been doing this since 2010 don’t forget, how many times is that excuse expected to work?
Now we’ve profiled all five people who I was able to identify as being involved with this trading bot software from the information I was provided. We know three of them have previously been accused of involvement in multiple online scams and and the other two may or may not even exist. If alarm bells are not ringing for you by now, you’re beyond salvation.
The last piece of content linked to in the message was the CWE Facts Sheet on google drive which I’ve downloaded as a PDF and re-posted here for posterity.
This Facts Sheet starts out by outlining some credentials:
“I have been in the network marketing space for 31 years and have been in the crypto space for about 8 years now.”
Okay hold on, stop right there.
I’d like to point out that blockchain was only invented in August 2008 and the network was publicly launched in January 2009. The oldest historical price data I can find about Bitcoin is dated 17 July 2010 and on that day 1 bitcoin traded for $0.05 USD.
So this person is claiming in January 2018 that they have been in crypto for 8 years means that possibly they are Satoshi Nakamoto (the inventor of Bitcoin) or at the very least they got into crypto at a time before the first Bitcoin exchange even opened. If true and they bought even just $100 of Bitcoin at the time, they would now be sitting on a fortune of around $200 Million USD. If the credentials are to be believed, it’s entirely likely the author would be writing this Facts Sheet from a private island while drinking single malt whiskey and playing bumper boats with super yachts. The probability of someone with these credentials shilling a $500 trading bot to people on Facebook is exactly zero.
The other thing that is really weird about this Facts Sheet is that the author never introduces themselves or signs the document off with their name. So we don’t even know who is claiming these unbelievable credentials. Perhaps it really is Satoshi Nakamoto??
The Fact Sheet is pretty long and to be honest by the second paragraph I’d found a lie so large that I didn’t even bother to read the rest of this document. I assume the rest of it is just as bad.
At the end of what was actually a pretty quick investigation I found that at best the CWE Trading Bot software itself poses a moderate to high security risk since we simply have no way of validating how it works or who really built it. At worst it’s plausibly capable of attempting to withdraw your funds from the exchange and possibly contains other unknown malware.
We don’t have any direct evidence that Crypto World Evolution is a Ponzi scheme… yet. As with all Ponzi schemes the direct evidence is only apparent in the very final stage of the scam, the collapse. When the pyramid can no longer sustain its own weight the payouts stop coming through to the members and the people who set this whole thing up do their very best disappearing act.
The team behind Crypto World Evolution appear to be shady to say the least. In the few minutes I spent vetting them I was able to link them to accusations of involvement in at least 5 other Ponzi schemes and online scams.
The conclusion should be obvious.
All the evidence suggests that Crypto World Evolution is a Ponzi scheme and the CWE Trading Bot software itself is likely to be programmed to steal your cryptocurrency.
Why Ponzi schemes are so destructive
One of the things that is so terrible about Ponzi schemes is that the scammers really push people to get those referrals. They especially push them to sign up their friends and family. One of the people on facebook claiming to be involved with the CWE bot Brandon Costin literally says in his video:
“I just want everyone to think about who they know, friends and family, that want to get involved in crypto”.
He then proceeds to tell the camera that the CWE bot is the easiest, best, safest, most profitable way for people new to crypto to get involved. If he is part of the CWE team, he is knowingly and shamelessly lying through his teeth to trick you into convincing your loved ones to put their hard earned money into this scam. The CWE website has similar statements on it. It’s abhorrent.
The tricky thing with Ponzi schemes is that not everyone involved are fraudsters. Once it proliferates past the scheme’s operators there’s a second much larger group of people who simply don’t know it’s a scam and are genuinely recommending it to their friends and family. A Ponzi scheme usually does payout a profit to members when it first starts which convinces members it works and they recommend it to their friends.
Sadly this ends with regular people who thought they were helping their loved ones earn a bit of extra cash unwittingly enable criminals to steal money from the people they care about. It’s heartbreaking.
Stay safe out there and always remember to do your due diligence.