The world of cryptocurrency has experienced remarkable growth in recent years, attracting both legitimate investors and, unfortunately, scammers who are seeking to exploit the complexities and allure of the market.
Social media platforms, with their extensive reach and ability to create a sense of trust and community, have become a breeding ground for these deceptive practices.
This article aims to provide you with the necessary knowledge and tools to navigate this digital minefield, helping you identify and avoid crypto scams based on social media.
The Rise of Social Media-Based Crypto Scams
Social media platforms have become a breeding ground for cryptocurrency scams, with bad actors using them to:
- Mimic famous brands and impersonate celebrities: They create fake accounts to promote fraudulent schemes and gain trust.
- Target unsuspecting users: Popular platforms like Twitter, Instagram, and TikTok are rife with bot scams promoting fake crypto projects.
These practices are concerning:
- EU consumer group blames social media: In June 2023, the BEUC criticised platforms like Instagram and TikTok for having loose policies that enable scammers to target teenagers.
Here’s how to stay safe:
- Be extra cautious: Don’t blindly trust crypto projects trending on social media. Research them thoroughly before investing.
Stay vigilant: Don’t interact with suspicious accounts or click on unknown links.
Identifying Scam Profiles and Messages on Social Platforms
Developing the ability to recognise warning signs is vital in today’s online environment. It’s important to be cautious of profiles that make unrealistic guarantees, offer generic or plagiarized material, and bombard you with excessive promotional messages.
Also, be cautious of unsolicited investment advice, particularly from accounts you’re unfamiliar with or have never interacted with before. Legitimate firms and individuals will not try to persuade you to invest via direct messages or social media comments.
Influence and Deception: How Scammers Manipulate Social Media
It’s vital to be aware of scammers who use social influence and emotional manipulation to gain trust. They may try to create a sense of urgency or exclusivity, exploit FOMO (fear of missing out), or pose as trusted figures like financial advisors or celebrities.
Keep in mind that legitimate investment opportunities won’t rely on high-pressure tactics or emotional appeals. By staying informed and alert, you can make smart investment decisions that align with your financial goals.
It’s wise to be informed and stay safe in the crypto world by watching out for these common scams:
- Phishing: Fake emails, websites, or messages try to steal your private keys or login details.
- Ponzi Schemes: Unsustainable schemes lure you with high returns, but use new investors’ money to pay earlier ones, eventually collapsing.
- Pump-and-Dump: Scammers inflate a lesser-known cryptocurrency’s price then sell, leaving others with worthless tokens.
- Fake Investment Offers: Don’t trust unsolicited guarantees or early access to new coins. Research before investing.
- Celebrity Endorsements: Scammers use fake celebrity endorsements to promote bogus schemes. Verify information through official channels.
Real Stories: Victims of Social Media Crypto Scams
The human cost of cryptocurrency scams is significant. Many individuals, including those saving for retirement or seeking financial independence, lose their hard-earned money, resulting in emotional distress and financial hardship.
An article by The Washington Post describes the unfortunate story of PJ Jenkins, a retired police officer from Atlantic City who lost $15,000 to a $66 million cryptocurrency scam. The scam involved an attractive woman, who used a liquidity mining scheme and pig butchering to deceive him.
Jenkins met the woman, Alice, on the dating app Hinge in September 2022. They began communicating on WhatsApp and talked about their lives, families, and everyday matters. Alice mentioned the concept of “liquidity mining” to Jenkins, describing it as a way to earn money by lending idle cryptocurrency investments.
Alice suggested to Jenkins to buy a mining certificate for $26 to start earning steady crypto returns, comparing the process of mining Ethereum cryptocurrency to mining for gold in a mountain.
To get started, Alice recommended that Jenkins use the Coinbase Wallet app, which is developed by one of the largest cryptocurrency trading platforms in the United States. She also directed him to a website called “CB-ETH.cc,” which seemed to be affiliated with Coinbase and was designed to handle liquidity mining.
Jenkins was sceptical of liquidity mining. But after some research, he invested $4,000 in Tether and CB-ETH to make $60 a day. Alice promised him a 15% monthly return if he reached $15,000. Jenkins even encouraged his family to invest in it.
There has been a rise in cryptocurrency scams on social media platforms such as Facebook, Instagram and WhatsApp, which are all operated by Meta. Jane is one of the many people who have fallen for these scams and lost a considerable amount of money.
In her case, she lost her life savings and loans worth £75,000 after investing in a cryptocurrency scam on Facebook. The scam falsely claimed to be endorsed by Martin Lewis, a consumer champion, and left her in debt.
Jane saw a promotion for “Current Coins” on Facebook in December last year, which claimed to be endorsed by Lewis, who is the founder of the MoneySavingExpert consumer advice site.
However, this promotion turned out to be a complex cryptocurrency scam. Initially, she invested a couple of hundred pounds in the scheme, but was then manipulated into handing over more money due to intense time pressure from the scammers. They threatened that she could lose everything she had invested if she didn’t invest more.
Social media fraud cases are increasing and . After taking legal action aexpected to cost UK households £250m this year against Facebook in 2018, Martin Lewis settled the case in 2019 after Facebook promised to donate £3m to an anti-scams project. The online safety bill will require social media platforms to take down paid-for scam adverts.
Staying Safe on Social Networks: Best Practices for Crypto Users
New to cryptocurrencies? Identifying scams can be challenging, but it’s easy with the right knowledge. Look for transparent blockchain and token information. Here are the red flags:
- Legitimate businesses never demand payment in cryptocurrency.
- Scammers guarantee profits or big returns.
- Dating site or app matches offering to teach you about crypto or asking for crypto is a scam.
- Pressure to act quickly is a sign of a scam.
- Only invest on credible, regulated exchanges.
- Avoid platforms with unclear investment terms, anonymous teams, or limited contact information
Collaborating Against Scams: Social Media Platforms’ Responsibility
Creating a safer online environment is the responsibility of everyone who uses social media platforms. To combat scams, there are steps that these platforms can take, such as implementing stricter account verification procedures, proactively removing fraudulent profiles, and educating users about online safety.
These actions will not only protect users from fraudulent activities but also promote trust and confidence in social media as a reliable source of information and communication.
To protect yourself against scammers, it’s important to learn their tricks and follow the best practices when using social media and dealing with cryptocurrencies.
Keep in mind that staying informed and being cautious are your strongest weapons against these fraudulent schemes. By doing so, you can navigate the digital landscape confidently and avoid falling prey to these deceptive tactics.
