What could go wrong?
Social media can be the source of a great enjoyment, but a recent study warns that it can also result in some serious financial misery.
There are scammers lurking in the internet wilderness, just waiting to separate people from their cryptocurrencies.
‘Most Vulnerable Sites’
Meta Platform’s (META) – Get Meta Platforms Inc. Report Instagram accounts for 32% of all fraud cases on social media, according to a study by TradingPlatforms, while Meta’s Facebook and WhatsApp came in second and third with 26% and 9%, respectively.
Investment frauds were the most recorded crypto scam originating on social media, TradingPlatforms said, resulting in the loss of $575 million worth of crypto, “significantly higher amount than any other sort of fraud.”
“The most vulnerable sites for scamming are Meta-owned,” a company spokesperson said in a statement. “This raises questions about Meta’s capacity to protect its users’ personal information and privacy.”
Meta Platforms did not immediately respond to a request for comment, but the social media giant has said in the past that “we use technology to detect and block scam ads and work to get ahead of scammers’ attempts to evade our detection systems.”
Crypto trading doesn’t involve banks, making it difficult to flag fraudulent activities, and, TradingPlatforms noted, “most victims are ignorant of how cryptocurrency works.”
‘The Dangling Carrot’
“The stories that people tell about these frauds describe a perfect storm,” the company said. “The dangling carrot is a promise of quick money.”
Scam artists in the crypto investment industry promise significant returns for their victim, but the “investments” in cryptocurrencies are transferred directly into the wallet of the con artist.
To gain the victim’s trust, scammers trick victims into believing they can track their Bitcoin through Instagram. However, this information is fabricated.
Some people said that they made a modest withdrawal as a “test,” which persuaded them to go all in. TradingPlatforms noted.
However, they get a notification to deposit extra transaction fees regarding actual withdrawals. Despite the additional deposit, they don’t receive the original funds back.
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TradingPlatforms warned that only scammers will ask consumers to pay in Bitcoin before purchasing or securing their money.
‘Significant Red Signal’
Also, scammers frequently promise large sums of money in exchange for a small risk, which TradingPlatforms deems “to be a significant red signal.”
Instagram-related crypto scams sparked a slew of comments on Twitter..
“It’s been almost 1 week since a scammer account popped up on @instagram impersonating me,” one post read. “Despite me warning my entire community and friends – this person continues to send DMs trying to run a crypto scam.”
Another person tweeted an image of a mobile phone with a notice from Instagram.
“I’ve had 15-20 fake Instagram scam profiles pop up so far this year… they keep DMing my friends/work colleagues and promoting crypto investment scams,” the caption read.
Another person asked “Why is it always Crypto scams that hack Instagram accounts.”
“One positive corollary of the massive crypto crash is that nobody seems to be getting their Instagram accounts hacked anymore for crypto scams,” another person said.
Even crypto evangelist Michael Saylor has had issues with social media scams.
“Every week I report & have removed 50-100 malicious imposter accounts from Twitter, Facebook, Instagram, LinkedIn, YouTube, + fake Web Domains attempting to scam innocents by offering free bitcoin, crypto, trading advice or services while imitating me or my firm,” the billionaire co-founder and CEO of MicroStrategy (MSTR) – Get MicroStrategy Incorporated Report said in a tweet last September. “Be careful.”
Early this year, Australia’s consumer watchdog (ACCC) sued Meta for allegedly “aided and abetted” celebrity scam ads on Facebook that have cost some Australians hundreds of thousands of dollars.”
The ads promoted investment in cryptocurrency or money-making schemes, the agency said.
Meta “engaged in false, misleading or deceptive conduct by publishing scam advertisements featuring prominent Australian public figures,” the regulator said.
The agency also charged that Meta aided and abetted or was knowingly concerned in false or misleading conduct and representations by the advertisers.
Read More: Instagram Has Some Unwanted Crypto Surprises