What are Ethereum Social Media Scams?
Scammers will try to trick you by creating fake social media accounts with people’s pictures and names. These fraudulent accounts can be used to promote fake companies and products. The blockchain startups in question may even claim they’re unlisted.
These social media accounts can have fake names and company logos, and many of them don’t share the logo of the actual Ethereum social media account. The original Ethereum social media accounts usually receive more engagement. For example, the official handle of the official Ethereum blog has more followers than the fraudulent Ethereum Twitter and Facebook accounts combined. The same is true for the official Bitcoin Instagram.
It’s easy to spot a scam.
How Do They Work?
Cryptocurrency can come with many rules, or even rules made by third parties. For example, Ethereum allows certain economic actions to be done without the company or user accepting a direct payment or paying a transaction fee. Other cryptocurrencies, such as Bitcoin, charge fees for certain transactions. But the blockchain technology can also automate some processes, meaning that it could make it possible for people to do transactions that would normally be paid for by third parties, for example crowdfunding for a startup. If a company wanted to take advantage of the blockchain to use cryptocurrencies, it could turn to these crowdfunding websites. However, these websites are regulated by third parties that still require any payment to be paid in fiat currency.
Common Types of Scams
Some scam companies pose as digital currency investment firms and ask investors to send their money to offshore bank accounts, promising a quick profit. Others claim to be Ethereum developers that want to revolutionize blockchain technology. Unfortunately, some developers will lie, and others will actually take your money.
Image from Pixabay
The most common scam is when someone says they’re an Ethereum developer. When you email them, they offer you their Ethereum address in return for a small fee, then ask you to deposit some money. They may also have a hacker screen grab of your personal information, or claim to be based in Nigeria and asking for money on the Cboe.com exchange.
Prevention Tips
Of course, you shouldn’t just ignore the scams that come your way. Check them out carefully to ensure that the company is legitimate.
Ask about the founder and CEO and their credentials. Look into the company’s track record by finding out who they’ve worked with in the past. Companies that have passed verification and compliance checks are a good sign that they’re committed to making a difference and working in the best interest of their investors.
Watch out for terms that don’t sound right. Those within the cryptocurrency community use a lot of technical jargon. For example, the word “mining” sounds like it should be spelled “munging” or “muting.”
Look into their history and how they’ve responded to criticisms.
Double-Check with the Company
Social media and general press around the concept of cryptocurrency is rapidly growing. Some sites feature fairly legitimate news about the companies and people that support the ecosystem, while others are used to make a quick buck or to further the interests of cyber criminals.
Remember that there is no such thing as a cryptocurrency scam, so you should approach all of your research with skepticism. It may be safer to stick to companies you know or companies you trust.
Feedback
You can also help protect your wallet by giving feedback on scams. You can make it known that you’ve received a scam, so that the next time that they offer the same thing, they can take the time to vet the company and avoid losing customers.
Research Before You Invest
Skeptical of investing in something so new and unregulated? Investing should be treated with caution at all times, especially when you’re looking at an industry that’s yet to achieve mainstream acceptance. But crypto scams can still try to lure people in with fake offerings or unproven projects. Before you invest any money, research the startup, its team, and the technology behind it.
“There are scam ICOs coming out left and right,” Coinbase President and COO Asiff Hirji told CBS News. “We’re seeing a lot of scam pitches to prospective investors. A lot of promise, but not much substance.”
Ignore Suspicious Email and Promotional Materials
If you receive a cryptocurrency offer from a different cryptocurrency or ICO, it may be a scam.
Conclusion
The integrity of the cryptocurrencies and the people in charge of them is being tested time and time again. With the implementation of new technology like Ethereum and Bitcoin, and cryptocurrencies in general, there are new types of scams surfacing. A lack of regulation is the culprit, and it’s the reason why it’s so important to have an open dialogue about cryptocurrency with your family and friends.