While browsing your favorite social media platform, you are likely to come across crypto adverstisements promising massive returns. But do not get too excited, as most of these advertisements are scams, which might lead you to lose your hard-earned cash.
Although there are legitimate crypto deals being advertised on social media, it has become challenging for people to distinguish between real and fake deals. This guide explains how social media users can identify crypto scam ads and protect themselves.
Understanding Cryptocurrency Scam Adverstisements
Crypto scam advertisements are found on social media platforms like Telegram, TikTok, Instagram, X, and Facebook. They intend to create the impression that you are one investment away from achieving financial freedom. However, the bad actors behind these crypto ads run illegal schemes and only want to steal investors’ money.
In 2023, crypto scam ads tricked millions of social media users, who collectively lost over $1.2 billion.
Types of Cryptocurrency Scam Ads
Here are the common scam ads for crypto you may come across:
1. Investment Offers: Such scams aim to trick potential investors by promising significant profits. They are usually Ponzi schemes, where funds obtained from new investors are distributed to initial investors.
2. Giveaways: Perpetrators who run giveaway crypto ads promise token airdrops to social media users who deposit a specified amount of money first. However, after sending the funds, you will likely not receive any tokens, and your money will be gone.
3.Phishing scams: In these scams, bad actors create ads with links directing people to fake websites that mimic real crypto projects. Those who follow the links are asked to enter sensitive information related to their crypto wallets, unknowingly allowing the scammers to steal their money.
What Are the Common Signs of Cryptocurrency Scam Ads?
The following are some red flags to look for in crypto scam ads to avoid falling victim.
1. Promises are too good to be true: When you encounter a crypto ad that promises high returns with no risk, you should proceed cautiously. All legitimate crypto investments carry some risks.
2. Celebrity endorsements: Over the past few years, public figures, from athletes to musicians and actors, have been used to endorse fraudulent crypto projects. Therefore, it is unwise to invest in a project merely because its ad features a celebrity.
3. Pressure tactics: Crypto scam ads intend to create FOMO (Fear of Missing Out) to pressure social media users to invest without thoroughly researching a particular project.
4. Anonymous developer team: If you cannot find information about the people behind a certain crypto project promoted on social media, that is a red flag. Most scammers hide their identities to avoid being caught.
5. Dubious Websites: If a crypto scam ad has a link directing you to a poorly designed website with little information, then you should treat this as a red flag and avoid sharing any personal data.
6. Hacked verified accounts: Crypto ads shared on well-known non-crypto social media accounts are posted mostly by scammers who illegally gain access to such accounts. So, don’t be too quick to invest.
Popular Cryptocurrency Scam Executed via Ads
Here are examples of cryptocurrency scams advertised on Social media since 2023, leading to significant financial losses.
Mandiant Hack
At the start of 2024, cybercriminals gained access to the X account of Mandiant, a prominent cybersecurity firm owned by Google, and shared a link to a fake website for claiming the “PHNTM” token airdrop. Those who connected their Solana wallets to the website lost money.
YieldTrust.ai Scam
In May 2023, US authorities revealed that crypto trading platform YieldTrust.ai was a scam and did not have a trading bot to generate massive profits as it had previously claimed. Moreover, YieldTrust.ai was accused of including malicious code that blocked users from withdrawing funds.
Vincent Anthony and David Gilbert’s Scheme
Vincent Anthony and David Gilbert advertised their fake AI-powered trading bot on social media in 2023, promising high profits to investors. According to the US Department of Justice, the two stole over $25 million from their victims.
