How to identify crypto scam ads on social media

Key takeaways

• Crypto scam ads often promise unrealistic returns, exploit celebrity endorsements and create urgency to lure victims.
• There are several types of scam crypto ads, including investment offers, giveaways, phishing scams and dating scams.
• Common characteristics of crypto ad scams include too-good-to-be-true promises, celebrity endorsements, pressure tactics, unverified claims, an anonymous team, a dubious website and hijacked verified accounts.
• When evaluating crypto ads, you should be cautious of unverifiable claims, anonymous teams and requests for personal information.

While browsing social media, you may have come across eye-catching advertisements promising easy money through cryptocurrency deals. These days, such ads seem to be ever-present. Many such advertisements are fraudulent, aiming to trick you into giving away your hard-earned money. 

The fast-growing cryptocurrency industry has led to a rise in scammers, making it difficult to distinguish between what’s real and what’s fake. This article explains how to identify cryptocurrency scam advertisements so that you can protect your funds from scammers. 

Understanding crypto scam ads on social media

Cryptocurrency scam ads are everywhere, trying to trick crypto enthusiasts and steal their money. Hop on social media sites like Facebook, Instagram, X or TikTok, and you’ll find a ton of advertisements promising huge profits from cryptocurrency investments. 

These ads are cleverly designed to grab your attention and create the impression that you’re only a click away from financial independence. However, most of these are just illegitimate schemes set up by scammers trying to steal your money.

At this point, you might be wondering how exactly scammers prey on social media users. It generally happens because people are often more mentally relaxed when browsing social media, and scammers take advantage of this, knowing a well-crafted ad or a persuasive recommendation may lead you to act impulsively.

Did you know? Social media is a hotbed for crypto scams. In 2023, over $1 billion was lost to scams originating on platforms like Facebook, Instagram and X.

Types of crypto scam advertisements

The most common crypto scam ads can be broken down into:

• Investment offers: These scams attempt to trick investors by offering them significant profits. However, they are often Ponzi schemes, in which funds from new investors are used to reimburse initial investors.
• Giveaways: Giveaways and airdrops are similar in that both involve handing out free tokens. But giveaways typically have fewer restrictions. To “qualify” for such giveaways, you may need to “deposit” a small amount first. Needless to say, once you send the money, you won’t get it back. While not all airdrops are scams, being cautious before participating in any offer is essential.

• Phishing scams: Crypto ads that employ phishing scams trick users by pretending to be legitimate cryptocurrency projects or services. Scammers create convincing ads or websites that closely mimic real ones, tricking you into entering your private keys or sensitive information. Once provided, the scammers can steal your funds, making recovery difficult. 

Did you know? Phishing scams remain the most prevalent threat in crypto, accounting for over 70% of all reported crypto attacks in 2023.

• Dating scams: These crypto scam ads are designed to get you into an online, long-distance relationship where the other party establishes trust over time and convinces you to share your cryptocurrency, either in a single transaction or over several. The scammer eventually disappears with the money.

Common signs of crypto scam ads

Cryptocurrency scam advertisements often share common traits. Here’s a summary of the red flags to watch out for to help you avoid falling victim to these scams:

• Too-good-to-be-true promises: Ads claiming excessively high returns with little to no risk should be viewed cautiously. There is always some risk associated with legitimate investments. Remember: “Profit is the reward for bearing the risk.”
• Celebrity endorsements: Scammers use fake ads featuring famous people to gain your trust. These ads falsely claim that well-known individuals have endorsed or invested in a scammer’s cryptocurrency project.
• Pressure tactics: Fraudulent crypto ads create a false sense of urgency. Scammers use phrases like “limited time offer” or “only a few spots left” to pressure you into quickly sending them crypto or personal information without taking the time to think it through.
• Anonymous or fake team members: If you can’t find any information about the team behind a project, that’s a red flag. Scammers often use fake names or stay anonymous to avoid getting caught.
• Dubious website and social media: Scam ads often direct you to poorly designed websites with minimal information and broken links. Their social media pages are usually new, with few followers and vague, unrelated posts.
• Hijacked verified accounts: Scammers sometimes hack into X accounts verified with blue checkmarks to post ads or tweets. They do this to make the posts appear credible, as the blue checkmark signifies trustworthiness on the platform.

Examples of crypto scams executed using ads

Let’s look at a few examples of crypto scams on social media to see how these ads can lead to scams.

Mandiant hack

In January 2024, hackers took control of the X account belonging to Mandiant, a cybersecurity company owned by Google. The hackers changed the account name and handle to Phantom and @phantomsolw, respectively, and promoted malicious links that falsely claimed to offer free PHNTM tokens to 250,000 users.

YieldTrust.ai scam

In April 2023, regulators in Texas and Alabama in the United States accused YieldTrust.ai, a cryptocurrency trading platform, of running a scam. According to regulators, the platform lied on social media about its trading bot’s being “capable of executing 70 times more trades with 25 times higher profits than any human trader could.” An independent audit revealed that the claim was bogus and that the code prevented users from accessing their own funds. YieldTrust.ai’s website and X account were later shut down.

David Gilbert and Vincent Anthony’s scheme

In December 2023, the US Department of Justice charged two individuals, David Gilbert Saffron and Vincent Anthony Mazzotta Jr., with operating a $25 million crypto Ponzi scheme. They reportedly tricked victims with promises of high profits using an automated trading bot but instead used the funds for lavish personal spending. The defendants concealed their activities through interchain swaps and cryptocurrency mixers.

Did you know? Social media influencers play a significant role in promoting crypto scams, often unknowingly. In 2023, over 10% of all reported crypto scams involved influencers promoting fraudulent projects or tokens to their followers.

How scammers use social media to target victims

Scammers target victims using the very capabilities and features that make social media platforms appealing, such as widespread connectivity, real-time communication and personalized content. Here’s how they conduct their fraudulent activities:

Strategies scammers use to spread ads

Fraudsters use social media skillfully, blending authentic information with scam content to deceive users, including by utilizing:

• Sponsored posts: Threat actors use sponsored posts to reach audiences, just as legitimate businesses do. By paying to promote their content, they can appear as genuine in your feed and be seen by users who wouldn’t have seen their content otherwise.
• Influencer partnerships: Some scammers pose as legitimate projects by working with or posing as influencers. They may pay influencers to promote their fake project or cryptocurrency, or they may create fraudulent accounts that mimic well-known influencers to appear credible. 
• False accounts: Scammers establish false accounts that mimic legitimate businesses or renowned personalities. Before attempting to steal money or personal information, these accounts might establish trust with you via genuine message exchanges.
• Deepfakes: Deepfakes employ artificial intelligence algorithms to generate highly realistic videos, audio recordings or documents. This technology allows scammers to produce incredibly convincing content, making it easier to manipulate and deceive users through social engineering tactics.

• Algorithms: Scammers have learned how to trigger social media algorithms. They create eye-catching images, engaging content and compelling messages that the algorithms will likely push to the top of your feed.
• Targeting tools: Like advertisers, threat actors can use targeting tools to reach specific age, geographic, interest or behavioral demographics. They can use these techniques to target specific vulnerable populations who may be more likely to fall for get-rich-quick scams.
• AI bots: Scammers use AI bots to bombard social media platforms with messages, comments and posts promoting scams, giving the impression that the scam is well-liked or widely accepted. Bots can interact with genuine people by liking, sharing and commenting on posts to increase the exposure and legitimacy of scam messages.

How to protect yourself from crypto scam ads

You can detect crypto fraud online by exercising awareness and developing helpful habits such as:

• Applying critical thinking and skepticism: In the digital age, when online fraudsters are just around the corner, it’s crucial to maintain a healthy degree of skepticism. Before making a decision, observe every offer from a distance and analyze it from multiple aspects. If something looks too good to be true, it’s better to avoid it. If a project requests money or sensitive personal data, first evaluate the project and the people behind it. Keep in mind that genuine offers are usually clear and not rushed or vague.
• Staying updated on the latest types of fraud: The methods scammers use to commit fraud are always changing, so it’s important to keep yourself educated on the latest trends in cybersecurity. Regularly checking reputable cryptocurrency news outlets or joining internet forums where people discuss their experiences regarding upcoming crypto projects and airdrops also helps protect yourself from crypto frauds. 

Following these strategies will help you identify crypto ad scams before they become a problem.

Defending against crypto scams: Vigilance is key

Dealing with ads leading up to cryptocurrency scams may seem hard, but you can guard yourself by exercising caution and staying updated on the latest trends in crypto fraud. Be on the lookout for warning signs, such as improbable claims, pressing demands for immediate action or dubious teams. 

Before investing, take a moment to double-check what you’re seeing on the screen. If you follow your gut and do your homework, you’ll be well-prepared to avoid the traps cryptocurrency scammers set online.