Tom’s construction company, which built cell phone towers, was doing well before the pandemic hit. He was on course to break $1 million in revenue in 2021, but then the COVID-19 lockdown brought everything to a halt. Isolated at home in Washington State, Tom, 34, got interested in cryptocurrency.
He began talking to his brother James about the huge potential returns from crypto investments, and the pair began researching. Tom and James are not the brothers’ real names. VICE News granted them anonymity to protect their privacy.
Back in 2014, James had nearly invested $100,000 in Bitcoin (an investment that would be worth over $6 million today) but he put the money towards a house for his family instead, he told VICE News. He was determined not to miss out on another golden opportunity.
So, after a few months of research, James invested some money in XRP, a cryptocurrency linked to the Ripple network, and a couple of other cryptocurrency tokens. “I have always played it pretty safe, I never really overspent on crypto in any way that would compromise my family’s financial stability,” he said.
But Tom’s research led him in a different direction, and like many , he was sucked into the conspiracy theory community. Soon, that same community was providing him with cryptocurrency investment advice.
Tom was actively following two major Telegram accounts, known as Whiplash347 and PatriotQakes, which were promoting dozens of tokens linked to the Stellar blockchain, the world’s third most popular crypto network behind Bitcoin and Ethereum.
But what Tom didn’t know was that these influencers weren’t simply providing neutral investment advice, as they claimed. They were linked to the tokens themselves, raking in millions of dollars from investors like Tom.
“[These tokens] have little to no utility. It is just a cash grab, which has a major following and is exploiting the misinformed who don’t understand what’s going on,” James said.
In the end, Tom invested over $100,000 in these scams, ruining his business in the process.
He also became increasingly extreme in his beliefs, going beyond QAnon conspiracy theories to espouse flat earth conspiracy theories, and speaking about the that the earth is secretly run by a race of lizard people.
Things came to a head for Tom in March of this year, when, according to his brother, one evening he climbed on top of his house, yelling and screaming, telling his neighbors he was going to kill them. The next night, he poured gas on his truck in front of his house and set it on fire.
When the police arrived, Tom told an officer that the officer’s house would be next. Tom was quickly arrested.
But while his family scrambled to get him some help, he was released from prison without any warning–on the condition that any guns he owned were taken away from him. That never happened, and he later died by suicide.
“He had guns registered to him and no one went to remove them from his possession,” James said. “Then on top of that, they let him outta jail two days early and didn’t notify us. So no one was there for him and no one knew he was outta jail. He walked straight home and took his own life.”
James believes that, though it was not the only factor in Tom dying by suicide, the loss of so much money in this cryptocurrency scam, and the subsequent loss of his business tipped his brother over the edge.
“My brother destroyed his life over this shit. Destroyed his business and lost everyone. He ultimately drove himself so far into debt, that eventually he killed himself,” James said.
The Telegram channels that were responsible for creating and promoting the cryptocurrency tokens Tom invested in did not respond to VICE News’ request for comment.
While Tom’s death by suicide is an extreme example of the consequences of these scams, , an organization that combats online misinformation, reveals how these two Telegram channels have fleeced thousands of people.
“Combining conspiracizing with bad investment advice, the WhipLash347 and Quantum Stellar Initiative Telegram channels coordinated to produce a weekly curated list of cryptocurrency assets, claiming that they had access to secret military intelligence and knew which assets were going to succeed,” the report states.
“The leaders, WhipLash347 and PatriotQakes, capitalized on distrust in both financial institutions and mainstream media to lend credence to the assets they promoted, and bombarded their tens of thousands of followers with misinformation about crypto ventures.”
It’s almost impossible to know exactly how much money these channels scammed from their followers, but estimates from Logically put the figure in the millions and the number of potential victims in the tens of thousands.
In a Telegram chat group for victims of the scams, some users are now revealing just how much money they claim to have lost:
The Whiplash347 channel is operated by an anonymous account, but has managed to amass 270,000 followers on Telegram by sharing a mixture of conspiracies linked to QAnon and the promise of a global financial reset.
The leader of the Quantum Stellar Initiative (QSI) channel is known as PatriotQakes but also goes by her real name, Emily Tang.
“I am without doubt that Whiplash347, Emily, and QSI are scam artists,” a former admin of the QSI chats called Rocky Morningside told Logically. “[They] were promoting pump and dumps, and this appeared to be a very large and well organized Ponzi Scheme.”
The scam worked because the Stellar blockchain allows anyone to create their own tokens in “5 easy steps,” which can be completed with very limited technical knowledge.
The dozens of tokens these scammers created over the course of the last year were named in such a way that they appeared to be linked to real-world companies, like the Sungold token, which the scammers baselessly claimed was linked to a real gold mine in Kazakhstan and a Russian company of the same name.
The influencers convinced their followers to invest in these tokens and to hold onto them even when the price appeared to spike, claiming that they would soon be rewarded when a great financial reset happens and the world’s wealth would be redistributed, a common belief among QAnon believers.
But, at a certain point, the tokens were transferred to another wallet controlled by the influencers, and cashed out or converted to other cryptocurrencies like Bitcoin or Ethereum.
Whiplash347 and Tang, together with a group of other users who helped run the channels, have leaned on their followers’ conspiratorial beliefs in order to convince them to invest in the bogus tokens.
This, according to Morningside, extends to speculation about UFOs and “white hats,” or secret military intelligence operatives. Tang has even said that aliens want people to trade cryptocurrency “as an on-ramp to familiarize ourselves with the quantum financial system until we can evolve into 5D and trade assets with our consciousness. How crazy is that?” Morningside said.
In Tom’s case, his belief in QAnon conspiracies, combined with his spiraling debt problems, and he kept chasing the rewards that Tang and Whiplash347 repeatedly promised their followers.
“It was definitely a huge part of the depression he was feeling toward the end,” James said. “When reality caught up with him and he was so far into debt—which ultimately led to him ending his life.”
Since Logically published its investigation last week, more people are speaking up about the sums they have lost to these scams, according to Ernie Piper, one of the researchers at Logically who uncovered the operation.
But inside the channels themselves, all dissenting voices are being silenced, and only the true believers remain. In one of the channel’s chat groups, which has over 11,000 followers, one member described the Logically investigation as a “cabal mockingbird media op. They have NOTHING new.”
And Piper said that despite drawing attention to the scams perpetrated by these channels, the scammers are still pushing their scams and finding fresh investors.
“QSI and Whiplash have already introduced several new ‘opportunities’ since our investigation broke, including an ‘Elon Musk’ token that has a domain created on the same day that we published,” Piper said. “I doubt they’ll change their ways anytime soon.”
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