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Cryptocurrency scammers love social media—especially Meta’s platforms. The Federal Trade Commission says hundreds of millions of dollars were scammed from U.S. consumers in 2021 (and that’s just the scams the FTC knows about).
And the problem’s growing incredibly fast—with no hint of a fix in sight. Meta claims to be “tackling” it, but we’ve probably all experienced scam reports to Facebook and Instagram being ignored or closed with no action. But why expect anything different? Meta makes money from all the scam ads and “engagement.”
Of course, some say all cryptocurrencies, NFTs and DeFi are scams. In today’s SB Blogwatch, we couldn’t possibly comment.
Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention: Nothingverse.
What’s the craic? Sarah Perez reports—“US consumers lost $770 million in social media scams in 2021, up 18x from 2017”:
“A large majority … involve cryptocurrency”
A growing number of U.S. consumers are getting scammed on social media. … That number has also increased 18 times … the FTC said, as new types of scams involving cryptocurrency and online shopping became more popular. This has also led to many younger consumers getting scammed.
…
Facebook and Instagram were where most of these social media scams took place. … More than half (54%) of the investment scams in 2021 began with social media platforms, where scammers would promote bogus investment opportunities or connect with people directly to encourage them to invest. … A large majority of the investment scams now involve cryptocurrency.
Why does it matter? Sara Fischer and Margaret Harding McGill tells us—“Crypto leads to massive surge in online scams”:
“Bogus investment sites”
Cryptocurrency is an easy target because while it’s surging in popularity, there’s still a lot of confusion about how it works. … One type of crypto scam reported to the agency involves someone bragging about their own success to drive people to bogus investment sites.
…
“We put significant resources towards tackling this kind of fraud and abuse,” said a spokesperson for … Meta. “We also go beyond suspending and deleting accounts, Pages, and ads. We take legal action against those responsible when we can and always encourage people to report this behavior when they see it.”
Horse’s mouth? Here’s the FTC’s Emma Fletcher—“Social media a gold mine for scammers”:
“Urgent need for money”
Social media is also increasingly where scammers go to con us. More than one in four people who reported losing money to fraud in 2021 said it started on social media with an ad, a post, or a message.
…
For scammers, there’s a lot to like about social media. It’s a low-cost way to reach billions of people. [It] is a tool for scammers in investment scams, particularly those involving bogus cryptocurrency investments — an area that has seen a massive surge. … People send money, often cryptocurrency, on promises of huge returns, but end up empty handed.
…
If you get a message from a friend about an opportunity or an urgent need for money, call them. Their account may have been hacked – especially if they ask you to pay by cryptocurrency, gift card, or wire transfer. … To learn more about how to spot, avoid, and report scams—and how to recover money if you’ve paid a scammer—visit ftc.gov/scams.
Who would fall for such scams? King_TJ hates to admit it:
“Facebook is complicit”
Hate to admit it, but I fell for one of these scams on Facebook myself. It was probably about a year ago. I ran across a “seller” in one of the ads that scrolled by on my feed. … There were plenty of comments posted ranging from other people interested in one, to claims they got one and liked it.
…
After a little while … the tracking info showed the package as delivered, but I never received anything at all. … When I started digging around more on Facebook after that, I realized the scammers … were actually running dozens of ads for various products, giving out web URLs that were almost identical except with one letter changed in their name. Reported the original ad … to Facebook, but … got no response.
…
That’s when it struck me that Facebook is complicit in all of this, in the sense they make a lot of ad revenue off of these scams. … It’s more profitable for them to turn a blind eye and simply take one down when a user complains about it specifically.
Facebook is complicit? Carrie Goldberg—@cagoldberglaw—puts it more bluntly:
Platforms love scams because user engagement is so high from all the accounts they create, posts, and messaging; not to mention the panicked use by victims.
What’s the latest imaginary-money scam? Animats offers this example:
“Transferring money from suckers to minters”
What was once the biggest NFT, Axie Infinity, has tanked. Today, for the first time, their Smooth Love Potion token fell below one cent. … The peak was around $0.36 last summer. This is the one all those people in the Philippines were playing a grinding game to earn, and paying about US$1000 up front to get into the game. [It] combined the worst features of a gig economy, multi-level marketing, and a Ponzi scheme.
…
The big problem is that NFTs are … mostly closed zero-sum systems for transferring money from suckers to minters. … What props up this house of cards is the success of Bitcoin, Ethereum, and Tether. We now have hundreds of billions of dollars invested in memes. So people think that investing in new memes is a real business. The history of financial scams suggests that it is not.
…
What could possibly go wrong?
Social media? arglebargle_xiv suggests a different word:
The scammers realised that … sites like Fecebook are absolutely perfect for, well, social engineering. It’s the perfect tool for con artists and scammers, you put all the data they need to take you in on the social engineering site, or you join groups that identify you as the perfect target … connecting you up to the people who want to scam you.
Is the emperor naked? johanneskanybal thinks so:
Half the YouTube comments on any investment video are scams, half the promoted tweets on Twitter are scams, half the Facebook ads are some type of scam. Imagine a traditional newspaper publishing a single one of those and what consequences they would face.
Meanwhile, quonset has little sympathy:
At this point, if people are so enamored with anti-social media that they abandon any semblance of common sense, they deserve what they get.
…
Yes, I am victim blaming. This is one of the extremely few times I do it.
Nothingverse: Memory of a Future Kingdom (The Movie)
Previously in And Finally
You have been reading SB Blogwatch by Richi Jennings. Richi curates the best bloggy bits, finest forums, and weirdest websites … so you don’t have to. Hate mail may be directed to @RiCHi or [email protected]. Ask your doctor before reading. Your mileage may vary. E&OE. 30.
Image sauce: DonkeyHotey (cc:by; leveled and cropped)
Richi Jennings is a foolish independent industry analyst, editor, and content strategist. A former developer and marketer, he’s also written or edited for Computerworld, Microsoft, Cisco, Micro Focus, HashiCorp, Ferris Research, Osterman Research, Orthogonal Thinking, Native Trust, Elgan Media, Petri, Cyren, Agari, Webroot, HP, HPE, NetApp on Forbes and CIO.com. Bizarrely, his ridiculous work has even won awards from the American Society of Business Publication Editors, ABM/Jesse H. Neal, and B2B Magazine.
richi has 321 posts and counting.See all posts by richi
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