Cryptocurrency scams are all over social media. Don’t get duped
On Sept. 15, Tim Dodd clicked on what he thought was a livestream on YouTube of SpaceX’s historic Inspiration4 launch from the Kennedy Space Center. What he saw next took him by surprise.
Dodd, a well-known space fan who created the YouTube channel Everyday Astronaut, landed a rare tour of SpaceX’s rocket facilities in Texas with CEO Elon Musk this summer. And it was just that footage Dodd saw. Someone had copied Dodd’s video to create fake livestreams of the launch, which was also part of a fundraiser for St. Jude Children’s Hospital. Scammers, Dodd says, were trying to trick people into donating Bitcoin on another site.
He said he’s reported at least two dozen cryptocurrency scam videos to YouTube, but they continue to pop up. “It just makes me feel so hopeless,” Dodd said.
Creating a fake live event video is just one way crooks are attempting to dupe crypto enthusiasts into giving away their assets. From fake giveaways to bogus investment sites, scammers use YouTube, Twitter and other social media sites to hook potential victims. Last week, Twitter flagged accounts that appeared to be tied to a Squid Game crypto coin and that bilked buyers out of more than $2 million by exploiting enthusiasm for the hit Netflix show. Scammers are even turning to dating apps to push these schemes.
Unlike a stolen credit number — an inconvenient but rarely troublesome issue — stolen crypto is basically gone. Many cryptocurrencies are decentralized, managed only by code running on a blockchain ledger.
Here are some ways to avoid getting duped on social networks:
Pay attention to the details
Recognizing a fake tweet, ad or video on social media can be tricky because scammers often steal images to give their ploys credibility. Sometimes they go as far as hacking verified accounts, creating the illusion of legitimacy by insinuating a well-known figure is involved. In 2020, hackers breached a handful of high-profile Twitter accounts to promote a cryptocurrency scam that promised to double the amount of Bitcoin sent to a specified address. Some of the accounts belonged to Musk, Amazon founder Jeff Bezos, celebrity Kim Kardashian and Joe Biden, who was running for US president at the time.
Look closely at the name of a website, the description of a YouTube video and the handle of a Twitter account. Little details, like a small misspelling, could be a red flag.
In March, the BBC reported a man in Germany was duped by a Bitcoin giveaway scam tweeted by a fake Musk account. The tweet asked people to send anything from 0.1 Bitcoin to 20 Bitcoin and Musk’s team would send back double the amount. The scammer created the illusion the account belonged to Musk by using it to reply to a real tweet from the Tesla boss. The scammer copied Musk’s profile picture and used a verified Twitter account. But if you look closely, the Twitter handle of the fake Musk account is @JoshyMcB not @elonmusk.
A Twitter spokesperson said using scam tactics on Twitter to obtain money or private financial information violates its rules. “We’re constantly adapting to bad actors’ evolving methods and have made improvements in combating cryptocurrency scams on the platform,” the spokesperson said. The company updated its verification policy, but Twitter has also mistakenly verified fake accounts before.
Satnam Narang, a staff research engineer at the security firm Tenable, estimates scammers stole more than $10 million using fake Twitter and YouTube accounts to promote bogus cryptocurrency giveaways before Musk’s appearance on Saturday Night Live in May. The scammers impersonated the Twitter accounts of SNL and celebrities, such as Miley Cyrus. Scammers have also used YouTube ads to promote a fake SpaceX coin.
“Even though cryptocurrency has been around for over a decade now, it’s just started to take hold,” Narang said. “A lot of people have a fear of missing out.”
Facebook is also filled with fake accounts. On Nov. 1, a verified page with more than 153,000 followers impersonating Musk falsely claimed the tech executive was doubling payments sent to a Bitcoin address for the next 30 minutes. The page transparency section, though, indicates the user changed their name multiple times and is located in Egypt.
The Facebook page is no longer available. Facebook didn’t respond to questions about the page.
During Google’s Pixel 6 event on Oct. 19, cryptocurrency scammers created a fake live video using footage from an earlier Google event. The slick scam uses the Google logo to convincingly sell itself as the Google Live YouTube channel. At one point, the imitation video had more than 41,000 views but it was taken down shortly after the event began. The video’s description, though, held telltale clues that it was bogus, moving between the first and third persons. A Google search showed parts of the text were plagiarized from a news article.
During the fake livestream, scammers directed people to another website that falsely said Google was giving away 1,000 Bitcoin and 20,000 Ether to celebrate the launch of its new smartphones. The scammers said people who sent Bitcoin or Ether would get more cryptocurrency back. The website, though, isn’t from a .google address, a sign that Google wasn’t behind a giveaway.
“Content intended to scam the YouTube community — such as cryptocurrency scams — or impersonate another YouTube channel is not allowed on YouTube,” said YouTube spokeswoman Ivy Choi in a statement. The company said from April to June it removed more than 3.7 million channels and 884,000 videos for spam, deceptive practices and scams.
Do your research
Scammers could try to lure you into investing through a bogus site, bringing up the topic while you’re chatting on a dating app or on social media. They’ll tell you about a new cryptocurrency opportunity they’ve jumped on, but it’s all a ruse to get you to invest through a fake website.
“These websites may even make it look like your investment is growing,” the FTC warned. “But people report that, when they try to withdraw supposed profits, they are told to send even more crypto — and end up getting nothing back,” the Federal Trade Commission warned.
From October 2020 to March 2021, nearly 7,000 people reported losses of more than $80 million to cryptocurrency investment scams, according to the FTC. The agency also said that over the past six months people have reported sending more than $2 million in cryptocurrency to Musk impersonators.
The agency says you should be wary if scammers guarantee you’ll make money or make big claims without details. You can also search for the name of the company or cryptocurrency with words such as “review,” “scam” or “complaint,” the agency noted.
If you do suspect someone is pushing a cryptocurrency scam, you can report it to the FTC, the Commodity Futures Trading Commission, the US Securities and Exchange Commission or the cryptocurrency exchange company you use.
Protect your cryptocurrency
Guardrails used to protect conventional online finance can also be applied to cryptocurrency to minimize potential losses if you do fall for a scam.
These include using a strong password, turning on two-factor authentication or using a separate email for your Bitcoin account. You can also use a type of hardware wallet, also known as a cold wallet, to store your private keys in a physical device like a USB stick.
You can store your cryptocurrency in a handful of separate wallets so you can keep funds you’ve set aside for investment apart from funds you expect to spend.
“It’s all the same things that we talk about when it comes to cyber hygiene that we apply to traditional finance,” Narang said. “It’s just this is like the Wild Wild West.”