Over the years, it has become a known fact for anyone dealing with cryptocurrencies that scams are running rampant. However, as more novice players enter the market, more scammers up their tactics to take advantage of unsuspecting Bitcoin enthusiasts with fake Bitcoin giveaways and other elaborate schemes.
Recently, a new bout of scammers has emerged with even more sophisticated and aggressive tactics. As evident through most reports, the scammers are taking advantage of popular social media platforms like YouTube and Twitter to capture their victims. For instance, on July 13 Charles Hoskinson who is the founder of Cardano warned about a YouTube account that has been promoting fake giveaways of Cardano (ADA).
Most recently a sizable attack targeting high profile twitter accounts has exposed the inherent security risks on major social media platforms. As Cointelegraph reported, potentially thousands of people got scammed out of their Bitcoin after several prominent and verified twitter accounts were hacked to promote a fake Bitcoin giveaway. The scammers managed to reach an estimated 350 million people making away with about $110,000 in a matter of hours.
In almost every twitter account belonging to a prominent individual, the audience was encouraged to send $1,000 in Bitcoin to a specified address to receive $2,000 as a free giveaway.
YouTube falls captive
Apart from Twitter, YouTube has also proven itself to be one of the favorite tools for scammers. According to a report published on July 10 by Whale Alert, one scam project that operated in June 2020, made away with more than $120,000 in a day by using a single-page website and YouTube advertising to lure unsuspecting victims.
Cardano’s CEO, Charles Hoskinson warned against scams promoting fake Cardano giveaways on YouTube. In a tweet, the founder of Cardano said that “a scam has been floating around using my conference keynote to promote a giveaway,” he added: “This is a scam. Please report it to YouTube. We will take legal action if we can against those responsible.” Although YouTube has since deleted the video, Hoskinson retweeted that there were still YouTube adverts promoting the scams.
Ripple’s CEO Brad Garlinghouse has also been targeted by impersonators who hack and rename YouTube channels as “XRP Giveaways” eventually fleecing millions from unwitting XRP holders. In response, Ripple has filed a lawsuit against YouTube for allegedly profiting from the actions of the scammers while having the ability to stop them.
In another case of scams on YouTube, a number of victims were lured into a pyramid scheme in early June after promises of a possible 200% payback for their bitcoin donation to a YouTube account named “SpaceX.”
According to reports, the scammer managed to get away with 15.3 BTC. Bleeping Computer reports that the scammers operate by hacking existing youtube channels, changing their channel name to SpaceX and publishing archived footage of Elon Musk (or any other public figure) to make it look like Musk’s archived speeches are live.
While the legitimate SpaceX channel has over 4 million subscribers, two of the channels hijacked by the scammers had 130,000 subscribers and 230,000 subscribers thereby giving the viewers the appearance of a legitimate following. Each of the fake SpaceX channels asked its viewers to send bitcoin to a specified address.
To further promote the fake youtube live streams to a wider audience the scammers used bots to scale up the number of viewers on the live streams thus giving an impression to the YouTube algorithm of a viral video.
With a combination of socially engineered tricks and boosted viewership from bots, the scammers managed to get their videos on top of youtube searches especially for keywords related to prominent individuals like Jack Ma and Elon Musk. Even though YouTube has since responded by taking down hacked channels that promoted the scams.
Whale Alert reports that giveaway scams find it easy to use the identities of celebrities to lure large audiences with the help of tools such as YouTube advertising. An affiliated service Scam Alert has reported that since the start of the year, the outfit reports that more than 20 million in Bitcoin has been stolen.