Social media has become both a blessing and a curse for society. It’s a blessing because you can get daily updates on what’s going on in the world, but it’s also a curse because it’s become as essential to life as oxygen, water, food, and shelter. Of course, social media has evolved into various forms worldwide, including a source of enjoyment through memes, inspiration through learning about money-making websites, motivation through influencers, and knowledge through posts.
However, social media networks, like anything else on the internet, social media networks have a dark side. First, there’s the unhealthy competitiveness that social media instills in young users’ minds. Then there’s the addictive nature of browsing through memes, GIFs, and videos on our feed till the early hours of the morning.
However, none of these disadvantages of social media are as dangerous as the sharp spike in cryptocurrency scams on these channels. It would be an exaggeration to suggest that Twitter, Facebook, and other social media sites have become the perfect breeding ground for cryptocurrency scams.
It is well known that digital currencies are not regulated by banks and financial entities, unlike fiat currencies. It means that anyone with excellent coding skills can research and develop their coin. Hence, getting your money back from a social media scam involving cryptocurrencies was a daunting undertaking due to the lack of expert services. However, several fund recovery companies have sprung up that promise to help you recover money from a cryptocurrency scam. They consist of lawyers, legal advisers, banking specialists, scam recovery specialists. They all come together and devise a strategy to catch hold of the scammer and get your money back.
A Social Media Scam
FaZe Clan, an esports and entertainment group, endorsed a new cryptocurrency project titled Save the Kids on social media in June 2021. This project, Save the Kids, was brought up to help impoverished children across the world, and it encouraged many individuals to invest in this charity through cryptocurrency.
However, the cryptocurrency’s value plummeted just hours after its launch, leaving numerous investors with nothing but a few bucks. The Save, the Kids project’s designers could have easily made tens of thousands of dollars, if not millions, by duping naive FaZe Clan fans. It’s especially concerning that FaZe Clan has more than 5 million Twitter followers.
This scam is not surprising because this isn’t the first time social media celebrities have used their influence to promote cryptocurrencies. In recent years, celebrities ranging from Kim Kardashian to Logan Paul has backed new cryptocurrencies.
Let’s decode the scam.
The “Save the Kids” idea smells like a pump-and-dump scheme. The scammers develop a new coin and recruit influencers in such scams. They urge them to invest in and promote an altcoin, a term for cryptocurrency, not bitcoin. The initial sale of the new digital currency is meticulously planned to avoid price increases.
Unassuming followers leap and end up spending their hard-earned money after influencers start promoting the altcoin on social media. It causes a rush and drives the cryptocurrency’s value to surge. However, when the inventors decide to manage the sale of their assets, public investors are left in the dark.
Why do scams like these work?
Given the prevalence of cryptocurrency frauds, it’s understandable to question why they still succeed. Firstly, cryptocurrency transactions are difficult to track due to their decentralized and irreversible nature. That means that if you lose money to a scammer, you won’t be able to seek help from any financial institutions.
The only other alternative would be to seek assistance from fund recovery experts. These companies use sophisticated technologies to track down missing funds and hold internet scammers accountable. Financial Fund Recovery, for example, a fund recovery expert, will use your information about the criminals to track and pursue your cryptocurrency fraud case with care.
It is highly advised to check and recheck before investing in any crypto. But these Gen Z and millennials hold social media influencers in high regard. Influencers are well-known public individuals who can sway people’s perspectives on new topics and make rash decisions based on emotions. As a result, they frequently purchase an altcoin due to its novelty rather than strategic investing decisions. Or it’s because they don’t want to be left out.
These variables combine to provide the ideal environment for social media-based crypto frauds to thrive. In addition, people aged 20 to 49 are five times more vulnerable to cryptocurrency scams than older folk.
What is the best course of action?
Online scams will flourish on social media as long as cryptocurrencies are untraceable and individuals trust social media influencers blindly. So it’s down to you to be on the lookout for warning signs. And to also check the company once on the Commodity Futures Trading Commission’s (CFTC) website before going any further.
If you stumble along with a new cryptocurrency, do some research to learn more about its origins and trading methods. Also, be skeptical of influencers who suddenly declare support for a new cryptocurrency. Finally, the secret to avoiding cryptocurrency social media frauds is never to let your guard down.