Recent developments in the crypto space have highlighted the ongoing risk of fraud, especially through social media channels.
The high-profile hacking events of X (formerly Twitter) exposed a significant number of compromised accounts, promoting fake memecoins. These events highlight security flaws and the extent to which fraudsters will go to exploit unsuspecting users.
Top Hacks and their effects
Many well-known X accounts—including those of Lenovo India and Yahoo News UK—have been hacked to support the fake memecoin known as HACKED.
According to blockchain researcher ZachXBT, investors are lured into buying the fake coin from these hacked accounts.
Community Alert: A number of major accounts in X currently have their accounts compromised and are posting a meme character scam. pic.twitter.com/8Bvaq59re5
— ZachXBT (@zachxbt) September 18, 2024
However, the scope of these accounts is significant, and despite avoiding being locked out of their hijacked accounts, these hackers apparently did not make much money. Reports revealed that they were only able to withdraw $8,000 from the program.
This is not a new trend. Last month hackers compromised French footballer Kylian Mbappe’s account to promote a fake coin.
Such incidents involving A-list celebrities and successful scams all fit into a larger trend of using celebrities and legitimate companies to build credibility and gain the trust of victims.
The use of compromised accounts in some way shows extreme weaknesses in social media security features, which bad actors take advantage of.
As of today, the market cap of cryptocurrencies stood at $2.10 trillion. Chart: TradingView.com
Crypto Fraud Machines
These scams use social engineering to push victims into impulsive actions. Scammers impersonate celebrities or organizations to create urgency and authenticity.
They may guarantee a high return on investment or offer exclusive access to limited-time opportunities. For example, victims may be encouraged to invest in a new cryptocurrency with promises of immediate profits, only to find themselves unable to withdraw their funds later.
They often get caught up in this through seemingly innocuous social media interactions. But more common is when hackers hijack friends’ accounts and write to their contacts asking them to invest in that account. This process uses trust and familiarity, making it easier for fraudsters to convince people to part with their money.
Update: So far it seems that scammers may be losing money by buying this method as the top sellers haven’t earned ~$1K and the market capitalization is $67K.
Although few details are available I would expect all these accounts to grant permissions to the same site/app.
A reminder to keep going… pic.twitter.com/gZcynD9rrV
— ZachXBT (@zachxbt) September 18, 2024
Safety Precautions and Public Information
As these scams continue to flourish, it is very important to raise public awareness, too. Experts like ZachXBT advise that regular review of account permissions and termination of unused applications can help prevent the risk people experience due to account breaches.
In addition, educating users about the common red flags of a scam, including at least those related to poorly written communications and promises of guaranteed returns, empowers users to make more effective decisions.
The regulations also target crypto fraud. The California Department of Financial Protection and Invention (DFPI) tracks and reports various frauds, helping victims report and get help. As the crypto landscape evolves, so must the strategies to protect users from becoming victims of these sophisticated schemes.
Recent hacks have proven that fraudsters can’t get away with breaking the law, but many people still risk huge losses. Users can better protect themselves against ever-changing crypto threats by staying informed and vigilant.
Featured image from Britannica, chart from TradingView