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Social media crypto scams are nothing new. The Federal Trade Commission (FTC) estimates that social media fraudsters made off with $770 million in 2021, with fake crypto and crypto investment scams accounting for a significant majority of those losses.
Protecting your business from being a victim of social media scammers or being unwittingly used to scam innocent victim is your prerogative. This guide will teach you all you need to know about social media crypto scams and how to avoid falling victim to them.
In this guide, we talk about:
Social media crypto scams are ploys or schemes bad faith actors employ to defraud crypto investors and owners.
Crypto scammers love social media, for good reason. It is a cost-effective way to communicate with billions of people around the globe. Social media supports anonymity as well, making it more difficult to have any crimes traced back to their perpetrator.
Scammers can easily create a fake accounts or hack into an existing profile to mislead the public and get them to participate in their scheme. They can easily adjust their strategy based on what they learn after sifting through people’s publicly available social media profiles. Most commonly, scammers tend to leverage public information to impersonate someone you might trust, whether that be colleagues, friends, or a company.
Scammers can also efficiently utilize the advertising features on social media sites to send personalized, fake adverts to prospective victims. In 2021, scammers used personalized Google ads to steal $500k worth of cryptocurrency by directing their victims to fake crypto wallets.
Investment scams are the most common type of social media scams. In 2021, more than half of those who reported losing money to investment scams claimed they invested in what turned out to be “shady” Ponzi schemes because they saw it on social media and were encouraged to invest.
Skepticism is a desirable trait to cultivate when it comes to believing what you see on social media, particularly when it comes to anything regarding investments or finances. With a little bit of caution and research, you can avoid falling victim to most social media crypto scams
Scammers often use social media’s built-in trust signals, (such as the blue checkmarks on Twitter for example), to their advantage when it comes to scams. They create false profiles of popular investors, celebrities and billionaires, and target their victims through
fake posts and unsolicited direct messages (DMs).
In a bid to appear legitimate and like real-life celebrities, scammers will design profile images that include a blue checkmark for their fake accounts, or they will skillfully insert a blue check emoji at just the perfect position to make it look real.
A simple way to determine the legitimacy of these accounts is to go through their profile and their social media posts. More often than not, these bogus profiles have posts riddled with errors in grammar and spelling, and the promise of fantastic rewards for doing nothing other than clicking a link.
There are other clear signs that the account is fraudulent, such as if they don’t have the number of followers they should have or if the account has only been created recently. You can tell if an account has been created recently by the timing of their first post or the total amount of their posts to date.
Like celebrities, businesses can get impersonated too. This is a particularly thorny issue for small and new crypto startups in the early stages of building an online presence because their reputation is at stake if someone thinks they are investing in these businesses when they’re actually sending funds to a scammer that’s impersonating them.
For brand owners, brand protection software such as a business impersonation removal tool can help solve this problem. For instance, Red Points’ business impersonation service can automate the detection and reporting of impersonators across all top social media platforms.
However, for general users the guidelines to avoid businesses that have been impersonated remain the same, study their online presence before deciding to click on any link. If the business’s social media presence doesn’t match up with what you’d expect from the brand, then it’s better to avoid clicking on any links they share or send you.
Most social media crypto scams succeed for one simple reason: greed.
Giveaway scams follow a general pattern. The scammers mimic famous brands and/or impersonate celebrities to advertise giveaways that promise to double your money if you transfer bitcoin or other crypto assets into a particular wallet address.
Of course, the opposite is true; once you send your cryptocurrency, you can never get it back.
Twitter is a very crypto-friendly social media platform, and scammers exploit the app in various ways.
Giveaways and impersonation scams are common. In 2021, a fraudulent Elon Musk account stole $2 million from victims through fake giveaways.
Scammers also target inexperienced twitter users with a variety of means ranging from fake airdrops to “helpful” twitter spam bots who offer to act as customer support for popular crypto exchange accounts and seek to know your login details all in the name of “assisting” you.
Although Twitter takes crypto scamming very seriously and is currently unveiling new updates to fight the spread of fraud on its platform, you are ultimately responsible for keeping yourself safe from fraudsters.
As a rule of thumb, never click a link on Twitter if you cannot verify its authenticity. If it looks too good to be true, it probably is.
Scammers go where the people are, and with over 3 billion monthly users, Facebook indisputably holds the record for being the largest social media platform in the world. Hence, it is hardly any surprise Facebook accounts for 26% of all social media fraud reports, second only to Instagram.
Criminals employ targeted Facebook ads and fake content influencers to shill and promote fake cryptocurrencies and investment scams. They may also attribute endorsements and fake quotes to real and popular celebrities in a bid to appear legitimate.
Crypto scammers are becoming increasingly popular on Instagram. Most of them offer free and fake tokens or claim to have exclusive knowledge on how to quickly amass wealth through Bitcoin or another alternative currency. The end goal is either to get your wallet login details or trick you into sending crypto to them.
Like other social media platforms listed so far, LinkedIn crypto scammers often dupe investors by offering deals that are too good to be true.
In a typical LinkedIn fraud case, a scammer will pose as a professional, and establish contact with a LinkedIn user, starting with light discussion before offering crypto investments that promise fantastic returns in a short period of time.
When the time is right, the bad actor behind the scam will exploit the credibility they’ve built up over the course of several months to convince the victim to send their money to a website under their control, at which point they will empty the victim’s account.
The first and most crucial thing to do if you or your business has fallen victim to cryptocurrency fraud is to register a complaint with the appropriate authorities and inform the cryptocurrency exchange where the crime occurred. Do this as soon as possible, before the scammers move your funds off the exchange and out of the reach of law enforcement.
For brands and businesses based in the United States, you can go to your local police station to lodge a complaint. You can also choose to report your case to the following authorities:
For European-based businesses, Europol is a helpful resource for finding the appropriate and relevant authorities to report crypto fraud. Europol recommends visiting your local police station to file a complaint if your Member State does not have a dedicated online option.
All cryptocurrency fraud complaints should generally contain the following pieces of information:
Protecting your brand from scammers and impersonators needs to be a key priority for every business. However, with the ubiquitous nature of crypto scammers and the ever-evolving world of social media, keeping constant vigilance over your brand’s name can be a challenge. Use Red Points’ Impersonation Removal tool to take down scams targeting your business or its clients!