A look at some common exploits and how to stay safe

Of CNBCTV18.com October 8, 2022, 1:49 p.m IST (published)

Of all crypto investors who reported being scammed on social media, 32 percent of victims said the exploits originated from Instagram, according to a report by the US Federal Trade Commission (FTC). The report’s findings were enough for several US senators to issue a joint letter to Meta CEO Mark Zuckerberg, questioning the company’s “efforts to combat cryptocurrency fraud on social media platforms, including Facebook, Instagram and WhatsApp.”

“We are concerned that Meta provides a breeding ground for cryptocurrency fraud that causes significant harm to consumers,” the lawmakers said in their letter last month.

These social media platforms, Instagram in particular, have become a hotspot for crypto scammers who con unsuspecting investors out of their hard-earned money. Even more worrying are the different MOs these scammers use and how genuine they seem. Some scammers hack into an Instagram account and send messages to the victim’s friends asking them to perform random tasks.

Unsuspecting individuals do what they are asked, unaware that they are playing into the hands of a fraudster. These tasks usually allow the fraudsters to control more and more Instagram accounts, where they spread fake crypto projects and trick unsuspecting investors into handing over their money.

This happened to Preksha Kasbe, a 25-year-old student based in Pune. One day Kasbe received a direct message (DM) from an old school friend Sonali. After the usual exchange of pleasantries, Sonali switched the conversation to “crypto investing and how it completely changed her life.” Intrigued by the prospect of making quick money, Kasbe followed up with Sonali about her investments.

Sonali told Kasbe that it was effortless; all she had to do was link a specific email address to her Instagram account. But when Kasbe linked to this email address, all hell broke loose. Her account was hacked and the crook started posting fake screenshots of how Kasbe got rich after following crypto investment advice from a man named Anna, the alleged scammer. The fake posts encouraged Kasbe’s friends list to invest their money in a scam token.

After some searching, Kabse managed to contact Sonali and it turns out that her account was also hacked through a similar MO. “This seems like a chain reaction of fraud,” Kasbe said.

In another type of exploit, fraudsters pose as experts and ask users to invest in well-known crypto platforms. These prominent projects inspire investor confidence. However, fraudsters use fake links and look-alike sites to direct the user’s money elsewhere. This is what happened to 27-year-old Jaipur-based stock trader Vivan D’Souza.

Like Kabse, D’Souza also received a DM on Instagram, not from a friend, but from a supposed crypto expert. This person asked him to invest in Binance, the world’s largest crypto exchange. After several days of talks and deliberations, D’Souza finally decided to invest in the platform and set aside Rs. 10,000 for the same. However, after making the payment, D’Souza realized it was a fake website that mirrored the look and feel of Binance. He lost his investment and never received a single token.

Another common exploit is the free Bitcoin scheme. Bad actors reach out to Instagram users with a promise to give them free Bitcoins. The catch? You have to pay a small “fee” to receive this BTC stash. Of course, the fraudster stops responding after receiving the payment. Other exploits include posting or messaging various get-rich-quick schemes. Others try to ask for private information, login details, etc. Some scammers also try to impersonate famous crypto personalities, exchanges, wallets, etc.

Stay safe from crypto scams on Instagram

First and foremost, never give away your details to people online. Trusted platforms will never ask for sensitive information, especially over a public forum like Instagram. If friends and family approach you to edit your login information, send them money, or invest in certain assets, make sure you confirm with the person before proceeding. If you receive messages about offers from trusted exchanges or crypto projects, visit the platform’s official website/Twitter page to verify the legitimacy of the offer.

Also examine any links you receive for minor spelling errors/variations. Fraudsters create and circulate fake links that look very similar to genuine websites to actual exchanges or trading platforms. Users who fail to find these fake links often end up getting scammed out of their money. Furthermore, it is best to avoid clicking on links from unknown accounts altogether; they are usually phishing attempts or lead to data collection.

Conclusion

Crypto scams can become more sophisticated by the day, but in the end they all depend on you to succeed. If you ignore strange messages and suspicious links, the scam is over before it can begin.