Is online job converting crypto to cash a scam?

Question

A friend of mine has been asking for help. They are not sure if what he is doing could get him in trouble in the future or if it is even legal.

He got a job as a finance assistant with an online company. They transfer him crypto, and in exchange, he sells the crypto for actual money and then transfers this to other real people that this said company he works for hires. So, they hire people to do ‘marketing work’, for example, subscriptions and likes, etc.

Not sure if this is legal or not as the source is originally crypto.

Answer 1

Crypto = Scam

A good rule of thumb is that crypto exists for money laundering, Ponzi schemes and pig butchering scams.

This setup is almost certainly money laundering

The "company" has some source of crypto - almost certainly illegal. (Ransomware, drugs, scams, etc) As part of obscuring the money trail, they pass crypto on to people like your friend, and they try to keep the amounts small to stay off the radar for as long as possible.

The transition from crypto to real money is often the most traceable part of the chain, so your friend is almost certainly the fall guy in a money laundering scheme.

Answer 2

Your friend should ask themselves: Does the story make sense? If I have bitcoin, I don’t need to hire anyone to convert it, I can easily do it myself. Then I have money, and I pay people just like everyone else does. I wouldn’t hire someone for the sole purpose of paying people. I wouldn’t employ a random person, give them a list of all my employees and make them pay money.

So for a legitimate company this job offer makes no sense whatsoever.

Answer 3

It will be some form of money laundering. The "company" is selling something and being paid in cryptocurrency, but some of their suppliers want paying in traditional money.

The person who's running this "company" doesn't ever want to be caught holding the cash or cryptocurrency. So they get a 'money mule' to do it for them.

Answer 4

Firstly this question concerns cryptocurrency, which a big warning sign for scams any time it is mentioned, and a major tool of criminals.

Secondly your friend should consider whether he knows anything about the complex world of cryptocurrency. If he checks, he will soon realise that he does not, which is another big warning sign.

Then, there's the issue that converting cryptocurrency to cash is not a job. It is something that can be done automatically, or very simply and casually by an exchange such as Netcoins by the person who owns the crypto. Always check if you are actually doing a real job. So if the thing you are doing is not a real job, then what are you doing there? Being used as a tool by a criminal, that's what. In other cases, you may think you are doing a job, but you are actually there to eventually give your money to the criminal by some process you do not realise.

Also, in checking whether the job is real, another basic step is to properly check whether the company is real. Even online companies should be real before you deal with them, let alone take 'jobs' with them. In this case, it is guaranteed that a reasonable search will show that this is a totally non-existent company. There is no legal employer, there is just a shadowy person sending the cryptocurrency. Your company you work for not actually being real is obviously a problem.

There are no people working for this fake company, doing 'marketing work' or any other work. Bad people will lie to you.

Your friend is being used by criminals to convert cryptocurrency because the criminals really don't want to do it themselves. That's one way they get caught.

Always, the criminals don't want to do the conversion themselves, because the cryptocurrency they are sending is stolen money, so he would rather your friend commit the offence of converting the stolen crypto to cash, so it is your friend that will get caught.

They probably pay your friend OK for what he does, but no payment is worth it for committing a criminal offence for other people that nobody will even be able to find later on.

What your friend is doing is 'money-laundering' (cleaning 'dirty' money for thieves so that they can get it back and spend it), and it's a serious felony. When it is found out, the only one the police will ever find is your friend, so they really won't want to let him go.

Your friend is called the 'money mule' in this scheme. Money mules often go to prison for money laundering.

They cannot find the thieves most times, because the crypto side is very hard to trace. And the thieves have taken all the steps to be anonymous. No name or contact your friend thinks he knows is real, any phone number will be a burner phone (or nowadays a VOIP number).

Your friend will find it hard to plead ignorance, because the job makes no sense, it is so clearly not with a real company (employment paperwork? tax codes? company registration? company business account? real office address? if he found the real company on Google Street View, and have the company registration, did he call to check the person actually works there?). Your friend would not only be the one committing the offence, he is getting paid for it, so he is part of the criminal gang, even if he says he didn't know.

If the pay is poor, he is risking going to prison for little money. If the pay is decent, he has even more chance of going to prison, because the court will assume that a reasonable person knows that they are doing something wrong, if they are being paid to do something strange. Something strange to do with other people's money!

It doesn't matter legally that your friend didn't steal the cryptocurrency, it doesn't matter legally that your friend was not aware that what he was doing is an offence. Ignorance of the law is no defence, sadly. The clear signs that nothing here is real or how business is done, will work strongly against your friend in court when he tries to say he fell into a trap and plead innocence and say he couldn't have known.

I suspect your friend knows there is something quite wrong here, but he is taking the attitude "How bad can it be?". The answer is obviously "very bad".

In the UK for example, laundering and distributing criminal money attracts a sentence of up to 14 years. Even with a shorter sentence, or even a big fine, a conviction can affect your friend's ability to have a bank account, borrow money, and work in certain sectors, like finance and anything related to law and being trustworthy.

Your friend should run very far away from this. Like yesterday.

Answer 5

They transfer him crypto and in exchange he sells the crypto for actual money...

Another answer already pointed this out, but is there some specific reason that the person who hired him can't do this himself? What does he need your friend for? A good rule of thumb is that if there's no plausible reason that they need you to facilitate the transaction, it's probably a scam.

...and they transfers this to other real people that this said company he works for hires.

No sane company has someone transfer money through their personal account in order to pay their employees - I've never heard of a legitimate company managing payroll like that. How do they pay taxes or track their finances? How do they know that your friend isn't embezzling money? I can't imagine an accountant ever agreeing to an organization managing their finances in such a manner.

Running payroll (especially manually) is non-trivial - there's a lot more to it than "transfer x dollars to Joe's bank account". You also need to consider things like tax withholding, retirement deposits, etc. Are they doing that? Also, does your friend have expertise or experience in running payroll? I seriously doubt that a legitimate company would have someone working solo on that who had no prior experience or training.

By way of example, a nonprofit I worked with had someone use their personal PayPal account to collect conference registration fees (which they then forwarded to the organization). This led to a major finding on their next financial audit, which in turn lead to a very tense meeting about the organization's finances. While there's no evidence that said individual actually embezzled funds, the audit pointed out that commingling funds like that created a risk for embezzling and created the appearance of impropriety.

In fact, as a further example, my spouse worked for a different organization in which an organization allowed someone to commingle funds to withdraw petty cash and the employee actually did embezzle money from the organization. I can't imagine the risk of running the organization's entire payroll in such a manner.

In short, the entire premise of this "job" is completely implausible. Others have pointed this out already, but this is almost certainly some form of a money-mule scam - they are having your friend launder dirty money for them.