With the increasing number of cryptocurrencies present in the market today, there have been an increasing number of cryptocurrency scams in the social media landscape. According to a report by the Federal Trade Commission (FTC), about $1 billion was lost to cryptocurrency scams ranging from 18 months to June 2022.

Nearly all the scams stemmed from a social media advert, post, or DM. This goes a long way to show how much cryptocurrency scams on social media have tangled their claws into the Cryptocurrency space.

Certik reports that one in every four people reporting a loss of money to fraud had social media to blame as the beginning of their problems. Experts from Beosin allude that in 2023, over $540 million was lost in 43 cyber attacks, with nearly $283 million and $66 million losses stemming from rug pulls and phishing attacks.

In addition, a report by Kaspersky also shows that there has been an increase in phasing scam attacks in the Cryptocurrency space. As compared to about 3,596,437 attacks in 2021, there were about 5,040,520 attacks in 2022.

These attacks stemmed from duping investors and top people in the space with the help of fake websites, fake DMs, etc. All of these gave these attackers access to multiple crypto assets.

The report by Kaspersky further showed that attackers are continually refining their strategies. They now go beyond giveaway scams, phony wallet phishing pages, etc. This is where social media scams find its root.

Most of these social media scams are made more believable when influencers give their voice behind projects they are very much aware of being rugs and scams. This leads to hype behind projects that are unvetted and are at high risk which unsuspecting Investors would then fall for.

More of these scammers now utilize the blue tick verification in platforms like X, Facebook, Instagram, etc. This makes it difficult to differentiate the wolves from the sheep. The verification badge was initially a way to detect original and trustworthy accounts. Now that just anyone can get it, it's serving as a tool to promote cryptocurrency social media scams.

Social media has become a dumping ground for tokens that have no value, and a place where misinformation has become a norm. It has become very easy to fall into the hands of these fraudsters who are ever ready to prey on those who aren't aware. As cryptocurrencies continue to gain relevance and become widely adopted, it has become clear that these scams will continue to increase.

Thus, it has become very important for you to be alert and do everything you can to protect your assets. This is what this article hopes to achieve - a means to bring this menace known as cryptocurrency social media scams to light and give you the means to protect yourself and your assets from these scams.

The Landscape of Crypto Social Media Scams

There are so many ways by which cryptocurrency scams exhibit themselves on social media.

These scams range from impersonation, fake investment schemes, pump-and-dumps, phishing scams, etc. Let's take a look at them.

Impersonation

In impersonation, scammers tend to create fake profiles of accounts they know are trusted and are considered reputable.

With these accounts, they promote their fraudulent investment opportunities, giveaways, etc to attract their victims. If you don't double-check, you'll end up taking the bait and being another example of those who have fallen for social media scams in the Cryptocurrency industry.

Fake Investment Opportunities

Scammers are brazen these days. They go all out and create fake websites and social media posts that promise unrealistic expectations to whoever engages with them.

Most fake cryptocurrency project takes this route. They create fraudulent platforms for trading, manipulate market signals, etc to lure their victims.

Pump-and-Dump Schemes

You'd be surprised at how coordinated these scammers can be. I've taken a trade before that seemed like I was on profit for hours on end. I knew something was wrong. Only a few people were selling. After much on-chain analysis, I found out that only the team members were selling and dumping the market. The rest of us were just providing liquidity, lol. It's funny thinking about it now. Then, it wasn't funny.

These Devs who engage in fraudulent practices like this would manipulate the contract so much that it would be almost impossible to detect it even if you run it through contract safety tools. They intentionally inflate the piece of a token through false hype and false community support.

Once the price reaches where they want it to get to, they start seeking their holdings. In some cases, you'd be able to sell if you catch on quickly. But in my case, I wasn't able to. In the end, investors obtain significant losses after the price of the token plummets.

Below is a typical pump-and-dump price chart as obtained with EthereumMax which was backed by celebrity fashion icon- Kim Kardashian.

Phishing Attempts

Another way scammers fraud people off their funds is through phishing attacks and social engineering. In the case of social engineering, they would ensure that you've been able to trust them by creating a sense of urgency and then get you to click on a link, reveal your private keys, or any other personal information that would help them achieve their goal.

In carrying out phishing, these scammers can also create a phony copy of original communication channels. An unsuspecting individual might just go ahead to carry out whatever action is needed as long as they can see that it's from an exchange they are signed up to or a wallet provider they use. However, in some cases, it might not be the case and it could prove a herculean task to distinguish the genuine one from the fake.

Fake Verification Ticks

The verification ticks on platforms Twitter (now X), Facebook, and the likes helped to prove authenticity and trustworthiness. Now that just anybody can get verified on X, scammers have gotten an edge to propagate their agenda.

Even Elon Musk hasn't been spared from the consequences of this blue tick verification troubles. Scammers often open accounts and pretend to be him. The same applies to other top personalities and celebrities. This is why you shouldn't be carried away by a verification tag. Always double-check any information you get from a page, no matter how legitimate it might appear to be.

Protecting Yourself from Crypto Social Media Scams

To protect yourself from these scams, there's a need for you to be gratefully aware and take proactive measures against such situations. Here are some steps that could help in protecting you from these scams:

Verify Information and Sources

Always do a double check, even a triple check on any Cryptocurrency project you want to invest in. All questions from knowledgeable people, do your research and utilize contract-checking tools to ensure that you're safe.

Beware of Unrealistic Promises

Don't be too greedy. This can make you lose focus. If an investment opportunity promises profits that are out of the world, you're most likely seeing yourself up for high risks if you invest in it. There are risks in cryptocurrency trading, yes. But don't allow yourself to become more at risk due to an investment that printed to give you something you know seems highly doubtful.

Protect Your Private Keys

Your seed phrases and private keys are yours alone. Do not ever share them with anyone. No legitimate cryptocurrency company will ask you for your private keys or sex knees. and never share your private keys or seed phases.

Enable Two-Factor Authentication (2FA)

Initiate 2FA on all your wallets, exchanges you trade on, etc. This helps to add a layer of security to your account and limits scammers from accessing your funds even if they have your password.

Report Scams and Be Vigilant

If you have a reason to doubt the legitimacy of any project, ensure to report such a platform to your community and get to hear what they have to say. You can also say something on social media and see what other people have to say about it. Also, be very vigilant and be at alert at all times.

Final Words

The rise of cryptocurrency social media scams is unlike any that's been seen before. You need to understand the tactics these scammers use and always be vigilant. If something is too good to be true, it's too good to be true. That's one rule that I've applied to nearly all aspects of my life and it has saved me remarkably from these scams and phishing attempts.

I hope you apply it too and that it helps to further protect you from these scams just like it does for me. If you have any other means you can use to protect yourself from some of these scams, please do share in the comments.