How to detect and report crypto gift fraud

This post was originally published in March 2020 and has been updated as of January 2024.

Tips to identify, avoid and report crypto scams

You may have seen them: the social media posts of scammers promoting Elon Musk cryptocurrency giveaway schemes, or President Joe Biden and other public figures promising free cryptocurrency. These posts include branding and profile photos that look exactly like those used by the companies, individuals or government authorities. It is important to be able to tell which accounts are fake, and which posts are cryptocurrency scams.

Scams like this exploit high-profile social media accounts to trick followers, often in the form of sending funds to the crypto-swindler via a digital wallet at the targets’ expense. Crypto scams can manifest in many forms, including: exit scam activities (when funds are pulled and projects are abandoned to take advantage of investors); crypto giveaway promises; false job offers; phishing scam tactics such as extortion, emails or text messages; withdrawal scams for investors, and even online dating.

These scams are an unfortunate byproduct of the increasing popularity of cryptocurrency and are a very real concern with costly consequences. According to TRM Labs, more than $9 billion was sent to various forms of cryptocurrency fraud schemes in 2022 alone.

And while cryptocurrency scams and cryptocrime more generally remain a small fraction of overall fraud, concerned regulators and law enforcement, industry players and advocates are taking proactive steps to help prevent spikes in social media scams and help with consumer protection regardless of whether they use crypto. or not.

Since its inception, Ripple and others in the industry have monitored and ensured the removal of countless fake ads and posts promising ways to earn free XRP – an open source, decentralized cryptocurrency and the native digital asset of the XRP Ledger. As a trusted resource in a growing industry where trust is paramount, it is important for Ripple to help educate consumers about these threats and how to avoid them. In support of this, here is a list of authentic social media handles of Ripple corporate accounts and some of Ripple’s executives:

Cryptocurrency Scams: What’s Real vs. What isn’t

Social media has made it possible for misinformation to spread quickly, so it is more important than ever to be aware and vigilant of what is real and what is not. Data from 2021 shows that fraud scams worth $2.3 billion in losses were reported – an increase of $1.1 billion from the previous year – while social media scams cost consumers $2.7 billion between 2021 and 2023

Some scammers impersonate companies and individuals by posting images on social media platforms such as X, Facebook or Instagram. Others use legitimate videos of media interviews or public speaking events and overlay scam content that may link to a fraudulent website or a crypto wallet address that asks targets to send money. Recently, there has even been an increase in the number of paid ads on social media pointing to crypto-scam sites – another case of fraudsters exploiting legitimate services to instill a sense of trust in victims.

There has been an increase in 2023 of scammers digitally manipulating videos (known as “deepfakes”) to develop convincing scams using the likeness of a public figure. Because deep fakes can be difficult to identify, they have contributed to the spread of misinformation, crypto scams, and other fraudulent acts.

More often than not, these posts will lead to fraudulent web domains with a public “send to” wallet address. There may even be a chat feature on the site to quickly convince you to transfer valuable digital currency funds.

Always be cautious when asked to share financial information, even if it appears to be from a trusted source or someone you know personally. As the saying goes, if it seems too good to be true, then it probably is.

How to Spot a Cryptocurrency Scam

Here are some helpful tips for spotting and reporting a cryptocurrency scam:

In many cases, the first warning that a giveaway ad is a scam is that you must first send money and/or provide your personal financial account information to receive the reward. For any real games, winnings are always free and never ask for money or financial account information in advance. Impersonations are more challenging to spot—often because scammers create a sense of legitimacy by using logos, social media verification checks, company management social handles, profile images, graphics, deepfakes, or legitimate video clips with branding that matches real corporate ones. images. Personal due diligence is key here. If a giveaway looks real, visit the company’s website and verified social channels to confirm if the ad exists there as well before agreeing to send or receive money. Additionally, scammers will use legitimate accounts to create a sense of fakeness by commenting on top of social posts with fake accounts. Some other quick visual signs that a comment account may be an impersonation scam include: the lack of a profile picture; strange account names; terminology in the comments that the company “loves” or “thanks” for the giveaway win; or comments limited or turned off completely to eliminate anyone commenting that this post is a scam.

Take action against crypto scams

Reporting suspicious behavior can often turn into a game of Whac-a-mole. Once one scam is reported and removed, a new scam quickly replaces it. Reporting crypto fraud activity relies heavily on the company in question as well as social media users (the targets) to identify and request fake accounts and harmful giveaway scams to ensure others do not fall victim.

If you suspect you’ve encountered a crypto scam, you can report fraud and other suspicious activity involving cryptocurrency to the Federal Bureau of Investigation (FBI). For fraudulent website reporting, use this quick form to submit the URL to Google which can be escalated to a third party for further investigation.

In response to the numerous XRP giveaway scams and impersonations, Ripple has also hired an external cybersecurity and digital threat intelligence provider to assist with reporting and takedown efforts. We also encourage the use of “Google Safe Browsing” which will warn users about dangerous websites or downloads. Wallet providers like Metamask and Coinbase also offer browser plugins that work in a similar way, raising notifications when users try to connect to a scam website.

At the end of the day, where there is money, there are always those who want to steal it. It is therefore essential to be aware of what you see on social media, to be on the lookout for signs of crypto scams and, above all, to protect yourself. No more members of the crypto community or global consumers need to fall victim to cryptocurrency scams. Remember, we are all in this together.