Recent developments in the cryptocurrency space have highlighted the ongoing risk of fraud, especially through social media channels.
The high-profile X (formerly Twitter) hack revealed a large number of compromised accounts, leading to the promotion of fake sites. MemcoinsThese incidents highlight security flaws as well as the lengths to which scammers can go to exploit unwary users.
High-profile breaches and their impacts
Several well-known X accounts — including Lenovo India and Yahoo News UK — have been hacked to support a fake memecoin known as HACKED.
According to blockchain researcher ZachXBT, investors were persuaded to buy the fake currency from these hacked accounts.
Community Alert: A number of large accounts on X have been hacked and are currently spreading a meme coin scam. pic.twitter.com/8Bvaq59re5
— ZachXBT (@zachxbt) September 18, 2024
However, the scope of these accounts is large, and despite avoiding closing their hacked accounts, these accounts Pirates It seems they didn’t make much money. Reports revealed they were only able to withdraw $8,000 from the scheme.
This isn’t a new trend. Last month, hackers hijacked French soccer player Kylian Mbappé’s account to advertise a fake currency.
Such incidents of A-list celebrity cloning and successful scams all fall into a much larger trend where celebrities and legitimate businesses are used to build credibility and gain the trust of victims.
The use of hacked accounts somehow exposes a severe weakness in social media security features, which criminals exploit.
As of today, the market cap of cryptocurrencies stood at $2.10 trillion. Chart: TradingView.com
Cryptocurrency Fraud Mechanisms
These scams are used Social engineering To get victims to take rash actions, scammers impersonate celebrities or organizations to create urgency and credibility.
These programs may promise high returns on investments or offer exclusive access to limited-time opportunities. For example, victims may be encouraged to invest in a new cryptocurrency with promises of quick profits, only to find themselves unable to withdraw their funds later.
Fraudsters often fall for this practice through harmless interactions on social networks. But the most common case was when hackers hacked into friends’ accounts and wrote to contacts asking them to invest through that account. This technique exploits trust and familiarity, making it easier for fraudsters to convince individuals to part with their money.
Update: So far it seems that the scammers have probably lost their money buying this method as the top traders only made $1000 and the market cap is $67k.
Although details are scarce, I would expect that all of these accounts were granted permissions to the same site/app.
Always a reminder to go… pic.twitter.com/gZcynD9rrV
— ZachXBT (@zachxbt) September 18, 2024
Safety Procedures and General Knowledge
As these scams continue to flourish, it becomes increasingly important to raise community awareness as well. Experts like ZachXBT advise that regular review of account permissions and disconnecting unused apps can help prevent people from being at risk due to account breaches.
Furthermore, educating users regarding common red flags of scams, including at least those related to poorly written communication and promises of guaranteed returns, enables users to make effective decisions.
The regulations also target cryptocurrency fraud. The California Department of Financial Protection and Innovation (DFPI) tracks and reports various scams, helping victims report them and get help. As the crypto landscape evolves, strategies must also evolve to protect users from falling prey to these complex schemes.
Recent hacks have proven that scammers can’t succeed through high-profile hacks, but many people are still risking significant losses. Users may be better able to defend against the ever-changing risks of cryptocurrencies by staying informed and vigilant.
Featured image from Encyclopedia Britannica, chart from TradingView
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