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Lafayette man loses life savings to website claiming to be cryptocurrency investment exchange

Expert says website was likely a scam
miles lafayette.png
Posted at 5:00 PM, May 16, 2022
and last updated 2022-05-17 08:56:53-04

LAFAYETTE — Miles McQueary of Lafayette thought he was doing what was best for his family.

He invested more than $9,000 in a cryptocurrency website. He lost it all and what was their life savings.

“I lost everything we had,” McQueary said. “It sucks.”

Cryptocurrency is a form of digital asset and is created by companies or individuals, usually taking the form of a virtual coin or token. Digital assets are intangible and generally exist only electronically, according to the Indiana Attorney General’s office.

McQueary was drawn to cryptocurrency by an advertisement he saw on social media.

“It was talking about Bitcoin, where you trade from one platform to another and there's a difference in price and you'll gain that difference in price per however much Bitcoin you have,” McQueary said.

McQueary invested in a website called BitXF, also known as Bit-X Financial Corp.

He said he was getting a return on his investment, or at least that’s what the website showed.

“It was showing we were making money,” McQueary said.

After two weeks of watching his money grow on the website, McQueary encountered a problem.

"I went to do my normal withdrawal to send it back to my crypto account and it said failure on the BitXF account,” McQueary said.

McQueary said he was locked out of his crypto account, and when he contacted BitXF they told him he was suspected of violating international anti-money laundering laws.

BitXF told McQueary to send personal information and more money.

In total, he lost $9,062.65.

“They literally took every dollar,” McQueary said. “We had two dollars in our bank account. That was everything. I sent it to them, I got no response."

McQueary reached out to WRTV Investigates for help.

We emailed BitXF about Miles’ account and the status of his money, but the “BitXF Global Customer Service Team” asked WRTV for thousands of dollars.

“After reviewing the system feedback from the department, you only need to continue to deposit the LTC or BTC worth 2368 USDT for final verification, and your withdrawal authority will be fully unlocked,” the email from BitXF read.

BitXF’s website claims they’re a British Columbia-based company, and a “reporting issuer” with the British Columbia Securities Commission.

WRTV Investigates did some checking and found the British Columbia Securities Commission has no record of BitXF.

“In addition, the British Columbia Securities Commission has had no contact with any crypto-asset exchange or platform that goes by that name,” a statement from BCSC read.

They’ve added BitXF to their Investment Caution List.

WRTV Investigates showed the website to Tim Sewell, CEO and co-founder of Reveal Risk, a Carmel-based cybersecurity consulting company.

He noticed several red flags right away.

“Customer service is misspelled,” Sewell said. “That’s usually one that websites will get right.”

Sewell also noted the websites used the word “guarantee,” which is impossible with cryptocurrency, he said.

Sewell said the BitXF server is in China, but buried in the fine print on the website.

“Here's a disclaimer: if you're in the Chinese mainland or the United States do not participate in investments,” Sewell said.

The BitXF website also used professional-looking price trend information, but Sewell said not to be fooled.

“You can pull these from a hundred different sources at any point in time and it's probably a drag and drop into the webpage,” Sewell said. “It's extremely easy. There are a number of ways to go clone a legitimate website."

WRTV Investigates asked Sewell if the BitXF website is a scam.

“Based on the website and what we're seeing here, I’d say it's darn near 100 percent chance,” Sewell said.

McQueary filed a complaint with the Better Business Bureau.

“They are hot right now,” Jennifer Adamany, spokesperson for the BBB Serving Central Indiana, said. “There's so much confusion about cryptocurrency right now makes it really fertile ground for scammers to tap into that."

Scammers took home $14 billion in cryptocurrency in 2021, and experts say investing is risky even if you’re using a legitimate website.

"We 're not saying don't engage with cryptocurrency, but with it and any type of investment, just be really well informed about it,” Adamany said.

As of May 6, the BitXF appears to be offline or removed.

McQueary admits he should have done more research.

"It's so embarrassing, it really is,” McQueary said. “I feel terrible. Here my wife was trusting that I was making the right decision. I lost everything we had. It sucks."

You can file an internet crime complaint with the FBI’s Internet Crime Complaint Center here.

BBB Tips to avoid cryptocurrency scams: 

  • Guard your wallet. If you buy cryptocurrency, the security of the wallet is of prime importance. If you lose the key, then your funds are gone permanently.  
  • Look carefully at email addresses and website addresses. Phishing scams often try to trick people into logging in and then capture the log in credentials. Those then can be used to steal money. Looking for an exchange with an internet search engine may lead to fake sites which advertise and impersonate real companies. Be especially careful when viewing these on a phone. 
  • Do not pay for products with cryptocurrency. Be careful if someone asks you to pay with Bitcoin or another cryptocurrency. No one with the government will ever ask for this form of payment. 
  • Beware of fake recovery companies. Scam companies sometimes claim that they can recover stolen money – for a fee. These are usually scammers.
  • Watch out for fake reviews. Scammers often create fake reviews for their own companies.
  • Be wary of celebrity endorsements. It can be tempting to rely on a prominent figure who has invested in cryptocurrency. But those endorsements are often not authorized and even if they are, the celebrity may be paid for the effort and may not know more about it than you do. 
  • Be careful about claims made on social media. This is the most common place for people to encounter investment scams. 
  • Be wary of “friends” who reach out to you on social media and tell you how they made money with cryptocurrency. Accounts are frequently compromised. Call your friend by phone to see if it is really them. 
  • Only download apps from Google Play or the App Store. Trusted app stores do not eliminate the threat of app scams, but they do offer a basic level of protection. Be careful with apps. Some contain malicious software. 
  • Do not believe promises of guaranteed returns. No one can guarantee how an investment will perform. 
  • Seek help and support. Cybercrime Support Network offers a free, confidential support program for romance scam survivors.