The Way of the Scammer: What to Look Out for When Running a Crypto Referral Scheme

In mid-November 2022, Lendingblock announced the launch of Refer & Earn, our referral scheme program. Over the last 9 months, our compliance team has learned a few things about catching out referral scheme abusers. Below, we’ll take a look at some common tactics used to unfairly game the system, some more sophisticated than others.

#1 - The Flash

As part of the referral scheme conditions, all participants have to verify their identities to prove that they’re a real person, otherwise, a single individual could create multiple anonymous accounts to pocket multiple referral bonuses.

We call this one, The Flash: an individual begins the ID verification process in one city on a desktop computer and finishes the verification on a smartphone in a city miles away a few minutes later, as seen by this Italian example below.

This individual began the ID verification on a desktop in Turin, and finished it on their smartphone in Milan 142km in a little over 2 minutes. Clearly, the individual who created the Lendingblock account in Turin can’t be the same person who verified their identity in Milan!

Of course, there is a possibility that this difference in location could be caused by using a VPN, however, VPN use goes against the platform T&Cs, so any accounts created using a VPN would be in breach of the accepted terms and subject to suspension/deletion.

#2 - The Clone

This tactic involves signing up with multiple accounts using the same ID for verification! Here’s an example below, that’s right Sergey, you didn’t throw us off by wearing a headset!

#3 - The Multiple Personality Disorder

This tactic involves the same individual signing up with multiple accounts under different names using fake IDs for verification.

#4 - The One Wallet To Rule Them All

Here, we would see multiple accounts withdrawing their referral rewards to the same wallet, sometimes up to 30 times, as seen in the below example! It’s also a red flag when all these withdrawals were initiated at roughly the same time on the 5th and 9th of May.

#5 - The Car Gang

One very well-traveled car in Georgia managed to create over 20 accounts, here’s an example of 6 of the verifications we received. Seem familiar?

#6 - The Hostel

One user created 4 accounts using the identities of 4 people staying in the same hostel, as seen below.

Closing remarks

We hope this has opened your eyes to some of the different types of abuse that your referral scheme could be subject to. Scammers, stay away!

If you’re looking for market-leading interest rates on your crypto, head on over to Lendingblock, but please, one account only!