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Matt Henderson, head of product at Aurora Labs, said there was a sophisticated over-the-counter (OTC) trading scam that nearly cost him his hard-earned cryptocurrency.

Henderson detailed his personal conflict with a scam artist named “Olai” to his Twitter followers on Aug. 5.

Olai’s scam essentially tricks victims into believing that they have received payment for an OTC crypto transaction, when in fact they are not.

how it works

Henderson explained that the crypto scam started when Olai contacted him on the Telegram messaging app with questions about using USC Coin (USDC) to buy AURORA tokens.

The parties agree to transact through escrow, a common strategy where a trusted neutral third party holds assets on both sides of the transaction and releases it to the counterparty when payment terms are met.

In this case, Henderson chose Aurora Labs’ head of security, Frank Braun, as an escrow agent, who he initially referred to as “Steve” in a Twitter thread.

However, Henderson found something suspicious when his escrow partner shared a screenshot of him allegedly agreeing to release all AURORA tokens to buyers.

According to Henderson, the scammer copied his Discord profile and instructed Braun to release the AURORA token balance to the scammer.

Discord’s blocking feature ensures that Henderson doesn’t know his profile has been cloned and that scammers are impersonating him.

After successfully circumventing the scam, Henderson later unraveled the intricacies of the scheme, warning anyone trading cryptocurrencies over-the-counter to be extra careful and avoid falling victim to the complex scheme.

Related: Solana Hacked Crypto Could Be Considered a Tax Loss: Experts

He also shared that a scammer named “Olai” may still be active in the community as people with similar names and tactics have already spot On Telegram, according to Twitter user Scott Yeager.

“Really curious…I was approached on Telegram recently by an Olai Olsen trying to initiate an OTC transaction and offer USDC. Same role?”

Earlier this year, the U.S. Federal Trade Commission found that by 2021, nearly half of all cryptocurrency-related scams will come from social media platforms.

In a June report, the FTC reported that scammers lost as much as $1 billion in cryptocurrency throughout the year, a more than five-fold increase from 2020.