Recent developments in the crypto space have underlined the continuous danger of frauds, especially via social media channels.
High-profile X (previously Twitter) hacking events have exposed significant number of victimized accounts, promoting fake memecoins. These events highlight security flaws as well as the extent scammers will go to exploit unsuspecting users.
High-Profile Hacks And Their Effects
Multiple well-known X accounts—including that of Lenovo India and Yahoo News UK—were hacked to support a fictitious memecoin known as HACKED.
According to blockchain researcher ZachXBT, investors were persuaded into buying the fake coin from these hacked accounts.
Community Alert: A number of large accounts on X currently have their account compromised and are posting a meme coin scam. pic.twitter.com/8Bvaq59re5
— ZachXBT (@zachxbt) September 18, 2024
However, the scope of these accounts is significant, and despite avoiding getting locked out of their hijacked accounts, these hackers apparently did not earn much money. Reports disclosed they were only able to siphon off a measly $8,000 from the scheme.
This is not a new trend. Last month hackers compromised French football player Kylian Mbappe’s account to advertise a fictional coin.
Such events of cloning A-list celebrities and succeeding with scams all fit into a much greater trend in which famous people and legit companies are used to both build credibility and gain victims’ trust.
The use of the compromised accounts somehow showcases an extreme weakness in social media’s security features, which bad actors take advantage of.
As of today, the market cap of cryptocurrencies stood at $2.10 trillion. Chart: TradingView.com
The Mechanics Of Crypto Frauds
These scams use social engineering to push victims into rash actions. Scammers impersonate celebrities or organizations to create urgency and authenticity.
They may guarantee high returns on investments or offer exclusive access to limited-time opportunities. For instance, victims might be encouraged to invest in a new cryptocurrency with promises of quick profits, only to find themselves unable to withdraw their funds later.
They often get trapped into this by seemingly harmless social networking interactions. But the most common case has been where hackers hijack friends’ accounts and write to contacts asking them to invest through that account. This technique exploits trust and familiarity, making it easier for scammers to convince individuals to part with their money.
Update: So far it seems like the scammers likely lost money purchasing this method as the top traders have barely made ~$1K and market cap is $67K.
While few details are available I would expect these accounts all gave permissions to the same site/app.
Reminder to always go… pic.twitter.com/gZcynD9rrV
— ZachXBT (@zachxbt) September 18, 2024
Safety Measures And Public Knowledge
The more these scams continue to thrive, the more important it is to heighten community awareness, too. Experts such as ZachXBT advise that regular reviews of account permissions and disconnection of unused apps would help prevent risks encountered by people due to account breaches.
Moreover, educating users regarding the common red flags of scams, including at least those relating to the poorly written communication and promises of guaranteed returns, empowers users to make decisions effectively.
Regulations are also targeting crypto fraud. California’s Department of Financial Protection and Innovation (DFPI) tracks and reports different frauds, helping victims report and get help. As the crypto landscape evolves, so too must the strategies for protecting users from falling prey to these sophisticated schemes.
Recent hacks have proved that scammers can hardly succeed through high-profile breaches, but many people still risk large losses. Users may better defend against crypto’s ever-changing risks by remaining aware and cautious.
Featured image from Britannica, chart from TradingView