Like most scams, the latest cryptocurrency scams plaguing social media platforms like Twitter are a case of “too good to be true.” Did you really believe that tech celebrities like Elon Musk or Vitalik Buterin would start giving away free cryptocurrency to their followers on Twitter? Did you really think that Hollywood stars like Jamie Foxx and sports stars like Floyd Mayweather wake up some days and decide to give away Bitcoin, Ethereum or any of the other popular alt-coins?
How Twitter cryptocurrency scams work
These Twitter cryptocurrency scams are so popular with cryptocurrency thieves and hackers simply because they are so easy to pull off on a daily basis. These hackers essentially piggyback on the celebrity status of big icon figures, who already have hundreds of thousands of followers. And they use the viral nature of social media to make sure that as many people as possible see and respond to their scam.
Here’s how the classic Twitter cryptocurrency scam works: a celebrity like Elon Musk sends out a tweet – such as the announcement of a new Falcon 9 rocket launch – and then a fake Elon Musk account comments on the tweet, announcing a free cryptocurrency giveaway because he’s so excited about the event. Just send a small amount of crypto to him and he’ll send you back 5, 10 or even 20 times the amount that you sent him. And then to make the scam as irresistible as possible, the hackers will use bots to like and comment on their comment. By the time the hackers are done, it can be hard to mistake fact for fiction!
Things have gotten so bad and so out of control that Vitalik Buterin – the creator of the popular Ethereum (ETH) cryptocurrency, has even changed his Twitter handle to Vitalik “Not Giving Away ETH” Buterin. He’s tired of people setting up fake accounts and trying to scam regular Twitter users out of their cryptocurrency. And John McAfee (of McAfee anti-virus fame) has also told his followers that he’s not giving away anything, ever.
Elad Erez, Director of innovation at security firm Imperva, started to notice a real rise in this sort of activity near the end of 2017, “Fraudulent crypto activities impersonating celebrities or influencers and taking advantage of their reputation, are definitely on the rise. A few weeks ago, we witnessed attackers target John McAfee’s iPhone (or directly AT&T) in order to take control over his Twitter account. Beginning of December 21, 2017 – he announced his “coin of the day” recommendation (later on changed to “coin of the week”) to his 800,000 followers. Due to this huge amount of followers, single tweets of Mr. McAfee have successfully influenced the volume (and price) of his coin recommendations, where some of the cryptocurrencies have instantly spiked in 60 to 350 percent.”
The rising trend of cryptocurrency scams in 2018
The Twitter cryptocurrency scams are really just a small part of the many scams being perpetrated in the crypto market on a daily basis. According to Bitcoin News, over $9 million is lost every day in crypto scams – and that’s just the scams that we know about and are reported. This $9 million figure is the sum total of all the phishing, hacking, fraud and downright theft attacks that have taken place this year. On an annualized basis, that works out to about $3.25 billion – or about the total annual GDP of a small underdeveloped nation!
In just the first two months of 2018, there have been 22 scams that have netted thieves more than $400,000 for their efforts. In total, over $1.36 billion has been stolen in just two months! Some of the crypto scams are now infamous, such as the Bitconnect scam, one of many Ponzi schemes to have rocked the crypto world.
And there is even growing concern that many initial coin offerings (ICOs) are really just a form of scam as well. People are told by touts all over the crypto world to buy up a hot new digital currency when it debuts – but it turns out that, just like the Twitter cryptocurrency scams, the story of a crypto that will skyrocket in value overnight is also too good to be true.
Is there a way to protect digital currency markets from cryptocurrency scams?
While it might be easy to dismiss the cryptocurrency markets as being inherently fraudulent almost by their very nature, the reality is that crypto is here to stay and it’s up to somebody to take responsibility for what’s happening. To its credit, Twitter says it is working now to suspend or close down fraudulent Twitter accounts that are creating, sharing and amplifying these cryptocurrency scams.