Cryptocurrency scams take many forms. It could be phishing, NFT scams, initial coin offerings, investment scams, or fake giveaway scams, the most infamous of them all.
Fake giveaway scams usually follow a basic pattern and trick users into sending their tokens to the scammers with a fake promise of giving a large number of tokens for free. They make these scams appear legitimate with the help of technology and people often fall for it.
Let’s take a look at the way they usually work and see how you can protect yourselves from such fraudulent schemes.
How do Crypto Giveaway scams work?
Crypto Giveaway scams usually appear on social media sites including Twitter and YouTube. Scammers impersonate prominent public figures, mostly billionaires like Elon Musk or Mark Zuckerberg, who are known in the crypto space.
They announce huge Giveaways that grab the attention of traders and internet users and present it as a once-in-a-lifetime opportunity that you shouldn’t miss out on.
The scams are designed to exploit the gullibility and FOMO of people, allowing scammers to steal millions of dollars worth of cryptocurrency in very little time.
They set up websites similar to that of genuine crypto sites, stealing and adding images of crypto contests and brand promotions. Once the users click on the links on the viral posts on social media platforms, it will take them to these fake sites where they will be asked to create an account to participate in the giveaway.
The users will then be asked to send some of their own crypto funds to the wallet addresses provided on the website, to activate the contest. Once the payment is completed, the scammers will steal the entire amount, leaving the investors with none of their tokens, let alone giveaways.
As the final step, they pull down the fake promotional websites and use crypto tumblers to hide the fund transfers.
How to spot them?
Although the promotional websites and social media pages are created to look legitimate, the scams are normally not that hard to identify.
To add genuineness, they might obtain the blue verified check mark if it is Twitter or Instagram, and there will be comments by bots claiming that they were rewarded in the contests. Still, there will be obvious signs that people often ignore trying to get rich quickly.
Fake urgency
This is one of the tactics they resort to rush you into making a decision. It might seem like you are about to miss out on a huge opportunity if you decide to stop and think about it, leading you to make impulsive and irrational decisions.
Celebrity figures
As mentioned above, they use deep fakes of celebrities to advertise the scam on popular social media platforms.
They launch spamming campaigns in email, SMS, and other public platforms, wherever possible and push the posts to go viral.
Huge rewards
The giveaways often involve huge amounts of tokens, worth tens of thousands of dollars.
Sometimes they offer to send back whatever amount you send them as the initial ‘activating’ payment. This acts as bait and some people might drain their entire crypto fund hoping to get rich without any effort.
Inconsistent website
Although similar to the original, the fraudulent websites set up for such scams often have inconsistencies and errors.
If you take a closer look, you might be able to spot spelling or grammatical errors that wouldn’t be found in a genuine crypto project site.
Initial payment
Fraudulent sites always ask for personal information and payment prior to giveaways. The amount you spend supposedly activates the reward you receive later, which itself should be a big red flag you should never fail to notice.
The Bottom Line
Once you lose it, cryptocurrencies cannot be recovered. The criminals withdraw the funds instantly and shut down the fake websites immediately after they are done with the scam. This will make it even more difficult the tokens that you have lost, especially with the crypto tumblers in play.
So, beware of everything that sounds too good to be true, conduct thorough research, and never send your tokens to anybody for free, no matter how tempting you find the deal they put forth.
