Some scams are easy to spot, but others are dressed up to look like a worthwhile investment opportunity. Here are some red flags to look out for so that whatever trading you do stays in the green.
Red Flag 1: Fake Celebrities, Scam Projects
In the digital age where social media platforms like Twitter and Instagram create a vast and diverse online community, it’s vital to be vigilant towards various forms of deception and scams. One telltale sign of potential deception on such platforms is the presence of fake celebrities and scam projects.
Before Elon Musk acquired Twitter, the platform had a massive problem with spam accounts and it was removing approximately 1 million fake accounts every day. In this flood of spam, many fake accounts impersonate famous people and try to trick unsuspecting victims into giving them money.
These fraudulent accounts often use usernames cleverly crafted to deceive users. Names like “Elom Musk,” “Elonn Musk,” or “Elon Nusk” are specifically designed to exploit the similarity to the real celebrity’s name and trick users into believing they are interacting with the genuine article. While some of these fake accounts are glaringly obvious in their inauthenticity, others employ sophisticated tactics to appear convincing, blurring the line between genuine and fake profiles. This imitation can be so convincing that it becomes challenging to distinguish between the impostors and the real celebrities or experts they impersonate.
Keep an eye out for:
To protect yourself from falling victim to such scams, it’s essential to be vigilant and keep an eye out for certain red flags. These include:
Misspelt names: Pay close attention to usernames that are one letter off or contain subtle misspellings of the celebrity’s or expert’s name. Scammers often rely on these small alterations to go unnoticed.
Underscores where they shouldn’t be there: Genuine accounts usually have straightforward and consistent usernames. It’s cause for suspicion if you encounter usernames with unusual underscores or characters that don’t align with normal naming conventions.
Unverified accounts: Legitimate celebrities and experts often have verified badges on their profiles, signifying that the platform has authenticated their identity. Be cautious of accounts lacking this verification mark, especially if they claim to be high-profile individuals.
Red Flag 1.2: Real Celebrities, Fake Endorsement
For many cryptocurrency projects, the endorsement of a prominent celebrity can make or break the project. Celebrities like Kim Kardashian, Floyd Mayweather, DJ Khaled, and Tom Brady have immense influence and boast massive followings on social media platforms. As a result of their influence, they are often approached to endorse various cryptocurrency projects. Not all celebrity endorsements are genuine acts of support. Some endorsements turn out to be part of elaborate scams, where the celebrity is completely unaware, and investors end up losing their money.
When evaluating the credibility of a celebrity’s investment advice, it’s essential to scrutinise the celebrity’s background in the field. Factors to consider include whether they have a history of involvement in cryptocurrency or finance and whether they possess credible insights into the industry.
If a celebrity lacks any prior experience or expertise in trading, technology, or cryptocurrency, their sudden interest in endorsing a particular project can be linked to suspicious behaviour from the project itself. In many cases, such endorsements are paid-for promotions rather than genuine confidence in the project. These paid endorsements can mislead the public because they create the illusion of legitimacy and trustworthiness.
Keep an eye out for:
To protect your investments and avoid falling victim to fraudulent schemes, approach celebrity endorsements of cryptocurrency projects with a healthy dose of scepticism. Instead of blindly following their advice, conduct thorough research, and consider the following warning signs:
Lack of relevant background: Take note of celebrities who lack any prior involvement in cryptocurrency trading, technology, or the financial sector. Their sudden interest in endorsing a project may be financially motivated rather than based on genuine knowledge and belief in the project’s potential.
Paid-for promotions: Investigate whether the celebrity received compensation for their endorsement. Genuine endorsements are typically driven by a belief in the project’s value, not by financial incentives.
Independent research: Make informed decisions by conducting your research, reading project whitepapers, and consulting reputable sources in the cryptocurrency community. Relying solely on celebrity endorsements can be risky.
Red Flag 2: The Promise of Huge Profits
“If it sounds too good to be true, it probably is…”
While the allure of quick and substantial financial gains can be enticing, it’s essential to approach such promises with scepticism. The reality is that there is no legitimate investment or trading opportunity that can guarantee massive returns with absolute certainty, especially at an unrealistic pace.
While getting quick money might sound great, losing money quickly is more likely with social media ‘traders’ that promote on social media.
The pursuit of quick profits can lead individuals down a perilous path, particularly when it involves self-proclaimed “traders” on social media platforms. These individuals often use social media as a platform to lure unsuspecting users into dubious investment schemes. While the promise of swift wealth may be tempting, it’s crucial to recognise that the risk of losing money rapidly is far more probable when dealing with unverified or unregulated “traders” operating on social media.
One of the telltale signs of potential scams on social media is unsolicited messages or comments from unknown accounts offering extraordinary investment opportunities. Such messages often promise incredible returns without any genuine basis or track record to support their claims. These unsolicited communications are typically aimed at convincing you to invest your funds, with the intention of making off with your money.
Keep an eye out for:
Terms directing you to a particular account with trading opportunities that promise to change your life: Be cautious of messages or comments that contain phrases like “life-changing investment” or “guaranteed profits.” Legitimate investment opportunities are rarely described in such grandiose terms.
Accounts promoted by multiple other accounts: Scammers often use bots or coordinated efforts to promote their fraudulent accounts through multiple other accounts. If you see an account mentioned or endorsed by more than one other account, it’s a red flag indicating potential deception.
Examples of suspicious messages:
- “Offering 800% ROI weekly trade on swing”: Such high and consistent returns are unrealistic and should raise immediate suspicion.
- “{Trader name} helped me find financial freedom and now I don’t have to worry about worrying.”: Vague and overly positive testimonials, especially when combined with extravagant claims, should be scrutinised.
- “I have {Trader name} to thank for helping me find my feet again. Message me for more information.”: Encouragements to contact for more information without providing concrete details or proof of legitimacy are typical tactics employed by scammers.
- “I won 306 bitcoin because of {Trader name}! Don’t miss this opportunity. Claims of significant winnings or profits with no verifiable evidence are red flags.
Red flag 3: Trying to Fake Account Credibility
Credibility is important for authentic accounts. Looking credible is important for scammers to appear authentic. To achieve this, scammers often use various tactics to fake an image of authenticity, often imitating the characteristics of genuine influencers, celebrities, or industry authorities. One such tactic is the use of a blue checkmark symbol in their account profile picture to create the illusion of being verified.
The deceptive power of the blue checkmark:
The blue checkmark, typically showing a verified account, has been a symbol of authenticity and trustworthiness on platforms like Twitter and Instagram for a long time. It usually signifies an account that is genuine and associated with a real person or entity of public interest.
However, scammers have taken advantage of the fact that, in some instances, verification badges, or blue ticks, can be purchased on social media platforms, particularly on Twitter and Instagram. This means that not all accounts with the blue tick verification are necessarily trustworthy.
Keep an eye out for:
- Blue ticks and inflated follower counts: While a blue tick can lend an appearance of credibility, it should not be taken at face value. Always consider other factors, such as the account’s content, engagement, and reputation outside of the social media platform. If they have masses of followers but no real engagement, they have likely bought their followers.
- Authentic interactions: Genuine influencers and authorities often have meaningful and real conversations with their followers. Beware of accounts that seem to lack meaningful engagement.
- Signs of bot engagement: Scammers often employ automated bots to artificially inflate follower counts and engagement metrics. Look for signs of suspicious activity, such as an unusually high number of likes or comments in a short time, repetitive or nonsensical comments, or generic, automated responses to user interactions.
Red Flag 4: Greedy Giveaways
“Greedy giveaways” represent a particularly deceptive and widespread tactic. These scams typically follow a familiar pattern: a scammer impersonates a celebrity or influential figure and advertises a giveaway that promises participants the opportunity to double their money or win substantial rewards, all in exchange for entering their personal details.
Data harvesting is often used in greedy giveaway scams. To participate in the giveaway, victims are asked to provide seemingly harmless information such as their birthday, full name, and email address. This data plays a crucial role in the scam, as it helps the fraudster carry out their harmful plans. While these requests for personal information might appear innocent at first, they can result in serious consequences. Scammers can use this data to build a profile of the victim, potentially gaining access to more sensitive information or even compromising their cryptocurrency wallet address.
It’s important to note that legitimate cryptocurrency giveaways, often referred to as “whitelist” giveaways, do exist. Typically, these events are organised in specialised channels on platforms like Discord and Telegram by trusted projects or communities. You won’t come across genuine cryptocurrency giveaways being advertised on popular social media sites such as Instagram, Twitter, and Facebook.
Keep an eye out for:
- Accounts asking for personal details: Be cautious of any account, especially those impersonating celebrities, that requests personal information, such as your date of birth, full name, or email address.
- Winning a competition you never entered: If you receive notifications claiming that you’ve won a competition or giveaway that you never participated in, it’s a strong indication of a scam.
- Random tags or mentions from unfamiliar crypto accounts: If you get tagged or mentioned in posts or comments by crypto accounts you don’t follow or have no prior interaction with, be sceptical and avoid engaging with them.
- “Free Bitcoin” promotions: Scammers often use the lure of “free Bitcoin” as a way to attract victims. Keep in mind that there is no such thing as genuinely free cryptocurrency, so any giveaway aggressively promoting this idea is likely fraudulent.
Red Flag 5: Claiming “Expert” Crypto Knowledge
The cryptocurrency space is rife with self-proclaimed “crypto experts” who have no real expertise in the industry. It is essential for individuals to think twice when listening to advice or information about digital assets. While there are legitimate experts who have valuable insights and experience, they are often outnumbered by the multitude of impostors who use their purported expertise as a means to deceive and manipulate unsuspecting users.
Fake “experts” tend to show the following behaviours:
Coercive tactics: Accounts falsely claiming to be crypto experts employ coercive strategies to gain followers and elicit interactions. These include promises of guaranteed profits, exclusive investment opportunities, or personalised advice in exchange for personal details or deposits.
A lack of genuine credentials: One of the red flags to watch out for is a lack of genuine credentials or a verifiable track record. True experts in the cryptocurrency field typically have a credible online presence that showcases their knowledge and accomplishments.
Keep an eye out for:
- Misleading titles: Be cautious of accounts that prominently feature titles like “crypto expert,” “crypto trader,” “professional trader,” or “Forex trader and entrepreneur.” While these titles can be genuine, they should be accompanied by evidence of expertise.
- The inability to provide proof of expertise: A clear indicator of a fake expert is their inability to provide any proof of their success or qualifications. Genuine experts will readily share their trading strategies, market analyses, or investment portfolios as evidence of their proficiency.
- A lack of a credible online presence: Authentic crypto experts typically have a visible and verifiable online presence. This includes participating in reputable forums, contributing to industry publications, or being featured in interviews or podcasts. If an “expert” cannot be found through online searches, it’s a tell-tale red flag.
