Over the past few years, cryptocurrency and social media have become fertile ground for scammers. Attackers create fake accounts pretending to be celebrities and well-known brands. This post will look closely at fraudulent schemes to raise awareness.
Cryptocurrency Scams – How Do They Work?
Crypto scams are cryptocurrency-related fraud schemes that trick people by promising high profits, easy earnings, or other favorable terms in exchange for their money or cryptocurrency. Crypto scams are a common problem in the world of cryptocurrencies, resulting in the loss of billions of dollars each year. Scammers often create fake websites or apps that look like official websites of cryptocurrency companies or exchanges. While these websites may appear legitimate initially, many factors give away their fakeness. These can be typos, or lack of information about how the website works and maximizes capital, questionable quotes, et cetera.
In addition, attackers often use social engineering techniques to convince people to reveal their data or information about cryptocurrency wallets. They use attractive offers, such as large amounts of free cryptocurrency, to attract users’ attention. Although all official services charge a small commission, which is the norm, scammers can convince the victim that their site does not charge a commission and also provides better exchange rates. And, of course, the main joker that scammers constantly use is the promise of easy money, which, unfortunately, is still a compelling argument.
Since these sites are mostly stamped on a template, they are usually very similar and differ only in name. In fact, these are one-day sites that do not live long, but for their short period of life, manage to pay for themselves and bring profit. After the scammers collect enough funds from victims, they delete the site and create new sites with other promises. Another standard practice is using social networks to attract victims, which we’ll discuss below. Scammers also create fake reviews and testimonials to convince victims of the legitimacy of their service.
The sites are completely the same, only the name differs
How Crypto Scams Attract People?
To get folks into their schemes, crooks use phishing, social engineering, and famous media personalities’ names to gain cryptocurrency newcomers’ trust. For example, Elon Musk, as it is his style to promote questionable things to the masses. In addition, Musk has a large following and a known presence in the crypto community, which makes these scams even more convincing. Using fake Twitter accounts (now X) identical to the real one, the scammers claim to be giving away cryptocurrency on behalf of Elon Musk. Once the real account publishes the post, the scammers from the fake accounts publish a reply to make it appear that the real account wrote it.
Another variation of this scheme is the distribution in TikTok of a deep fake video in which Elon Musk gives an interview to a TV channel and advertises a website that supposedly offers crypto. The user is encouraged to register on the website and enter the promo code specified in the video. After that, the user receives a bonus of 0.34 BTC in a wallet. However, when attempting to withdraw this money, the website gives an error and asks to deposit 0,005 BTC to activate the account. After the victim deposits this money, the site still won’t allow the withdrawal.
TikTok fake video
Another one scam variant involves hacking into a real account and publishing a fraudulent post on its behalf. For example, there were cases when scammers hacked Pantheon Books, film production company Pathe UK and the US, and politician Frank Pallone Jr. Usually, scammers encourage subscribers to send a certain amount of crypto to a specified account and promise to double the amount. Gullible subscribers send various amounts to the account expecting to be refunded twice as much; however, no one ever repays anything. Nevertheless, the scheme works, as about $170,000 was collected from one account.
Cryptocurrency recovery scams
Another type of fraud that is not obvious is the stolen fund’s recovery assistance or twice scam. This scheme is designed for those who have been victimized by cryptocurrency fraud. Scammers pretend to be a refund organization and offer to help the victim return stolen cryptocurrency for a small fee. Most often, they leave comments and messages in thematic forums, and sometimes, they reach victims on social media, offering their services.
In the communication process, scammers ask for an advance payment and block the victim after receiving it. Sometimes, they may ask for money several times, for example, to solve an issue or for a “private FBI agent”. Yep, scammers claim to cooperate with law enforcement. However, no private organization can order the confiscation of stolen digital assets.
Crypto Scam Stats
As of mid-2023, it is estimated that people have lost more than $14 billion to cryptocurrency fraud schemes. Global investment fraud losses have skyrocketed from $1.45 b in 2021 to $3.31 b in 2022. The fraud surge is due to an influx of inexperienced investors entering the market. However, remembering that anyone can fall victim to scammers, including more experienced investors and knowledgeable cryptocurrency users, is essential.
In addition, the change in Twitter’s blue checkmark policy further exacerbates the problem. Previously, to get it, the service had to verify the user, think hard, and only if approved the account received a checkmark. It indicated that the user was verified and was real. However, now, a blue checkmark means the user can pay $8 monthly. Obviously, the scammers couldn’t pass by and not take advantage of this.
Researchers analyzed scam kits distributed on the dark web. Although they have a sleek appearance, the code behind them is pretty simple. The kits typically include HTML and JavaScript elements, with features like Smartsupp Live Chat and hidden Bitcoin and Ethereum addresses. Some kits collect victim information and push it to an attacker’s Telegram channel. The wallets associated with these kits showed multiple small transactions for 0.3 BTC. These kits often originate from Europe, with a concentration in Russia.
A fake website that copies the BBC
How to Spot and Avoid Crypto Scams?
Unfortunately, these fraudulent schemes are highly successful because they target the human element. Being vigilant against these illegal sites is the only way to ensure you don’t become a victim. There are a few red flags that will help you recognize a scam.
- There is a price to pay for everything in life. Be extremely cautious when you come across sites that offer something for free. This applies to ads, posts, and comments on social media. Official sites that have tens of thousands of users are unlikely to be able to provide gifts for all users. If it sounds too good to be true, it is.
- Don’t send cryptocurrency to someone you don’t know. Remember the previous point if someone on social media promises you a reward in exchange for cryptocurrency. Please don’t send it to someone you don’t know anything about. It’s obviously a scam.
- Make sure the celebrity’s account is real. Due to changes in getting a blue tick on Twitter, it has become impossible to distinguish a legitimate person from an illegitimate one on the platform. You can go to the official website of the media personality and verify the link to their Twitter account with the one you are dealing with.
- Pay attention to the username. You can search by name, and the social network will give the official account one of the first in the list. The username of the official account should match the username of the user you are interacting with.
- Pay attention to the “age” of the account. Since celebrities have had active social media accounts for years, they have a history. If the account you see is brand new, it’s probably fake.
- Do your own investigation. While legitimate giveaways exist, a legitimate giveaway from an organization of this size will have numerous press releases and articles announcing it. Otherwise, it’s a scam.
Ever since these scams started, Twitter has been trying to eliminate them. Obviously, they will have to keep working on it, as it hasn’t been very successful so far. If you encounter a giveaway scam, report it to the platform and the authorities. By reporting the scam, you will help others not fall for it.
