Twitter Scams Cost Millions, Solutions Emerging
People have lost over USD 5 million (in ether) to so-called 'trust-trading' scams. There are now technological solutions intended to combat Twitter fakes.
Ever since crypto became seriously big business towards the end of 2017, Twitter in particular has been inundated with fake accounts impersonating notable crypto figures, promising to send crypto to other users so long as they send their own crypto first.
Given all the publicity such scams have attracted since the beginning of the year, you'd be forgiven for assuming that the general public are wising up to them.
However, the latest data from Etherscam and Etherscan reveal that people have lost over USD 5 million to so-called 'trust-trading' scams to date. And this only in ether. That said, a number of technical solutions are being proposed to weed out fake social media accounts, following complaints from the likes of Vitalik Buterin, a co-founder of the Ethereum platform, about the problem.
Scams are still increasing
Most recently, a Twitter fake gained attention by posing as Elon Musk, SpaceX and Tesla superstar and tech hero, who then took to Twitter himself to praise whoever tried to make a quick buck out of his good name:
The fraud in question involved the fake account posting a link to an "Official ETH and BTC Giveaway," but what was most interesting/alarming about its attempt at defrauding people was that its words were actually quoted by Sky News as if they’d come from Musk himself.
This isn't the first time a media outlet has confused a Twitter scambot for the actual person it impersonated. However, the latest mistake is a stark indication of how crypto scams are continuing to fool people despite their increasing notoriety.
The Ethereum Scam Database tracks "trust-trading" scams, as it calls them. These don't just cover the Twitter scams above, but also any fraudulent website or online account that asks people to send crypto in order to receive even more crypto in return.
According to data from DirtyETH – which combines info from the Ethereum Scam Database with stats from etherscan.io – just over 530 of such scams have duped people out of ETH worth USD 5 million. And yet, given that ETH comprises about 17% of the total market cap of all cryptocurrencies, the total cost could be as much as USD 29.5 million.
This is a big figure, and what's surprising is that it's being driven upwards by people who should know better, with one self-described "cybersecurity expert" reporting recently on Reddit that he fell victim to a Twitter scam that ripped off Andreas Antonopoulos, a Bitcoin evangelist.
In the very same thread, another user indignantly criticised Twitter for failing to do anything to curb trust-trading scams, and also suggested to the original poster that they code "some second layer solution together." And in fact, this kind of response hasn't been restricted to Reddit, with various members of the Ethereum community calling for much the same thing:
Fortunately, there are now a small handful of proposed technological solutions intended to combat Twitter fakes. One of these is MetaCert, a San Franciscan company that has built a blockchain-based platform that can verify apps, websites, wallets, and social media accounts. It has a browser extension called Cryptonite, which uses "Uniform Resource Identifiers" (i.e. confirmed identifiers of a particular entity, such as domain names and social media handles) to validate whether an account is genuine.
Another is Scam Clerk, which is essentially a malicious activity detector that scans the user's Twitter account for impersonators. Yet another is the Singapore-based Sentinel Protocol: a crowdsourced intelligence platform that can protect crypto holders against scams, for example by filtering wallet addresses according to whether they've been reported as malicious by users. Another comparable solution is MyCrypto, a general platform for users to manage their crypto that also enables them to check whether certain wallet addresses are on blacklists.
Send us your lunch to receive an even bigger lunch
And aside from these third-party '2nd layer' solutions, it would also seem that Twitter itself is taking action against fake accounts. It has begun systematically removing millions of fake accounts and followers from its platform, and while it hasn't specifically addressed the issue of crypto-giveaway bots, it's highly likely that its culls will sweep away many examples of the latter.
Of course, most of these removals will be reactive rather than preemptive, meaning that users will still need to be wary of any account claiming to offer 'free crypto.' So as the saying goes: remember, there's no such thing as a free lunch.