Any activity that involves a profit potential always has an underlying element of fraud. Unsurprisingly, cryptocurrency is no exception. In recent years, cryptocurrency giveaways have sparked several debates on social media crypto communities, with people questioning the legitimacy of giving away valuable assets to completely unknown individuals.
In contrast to popular belief, crypto giveaways are not entirely free as it requires participants to complete a task, such as signing up on a website, referring more users, or doing other tasks as described by the giver to build an active community for a project.
However, despite crypto giveaways being an important community-building tool that can be used to build an active community, reward members of a community, and, most importantly, as a free word-of-mouth marketing tool, scammers are taking advantage of it for fraudulent operations to steal users' funds. As a result, crypto giveaway scam has been on the rise within the sector, with naive users continually falling victim.
So, what exactly is a crypto giveaway scam? What are the most common methods by which scammers carry out these giveaway scams? How can you identify and avoid giveaway scams?
What is a Crypto Giveaway Scam?
A crypto giveaway scam is a type of social engineering in which a scammer attempts to deceive a cryptocurrency user or investor into believing that an upcoming cryptocurrency project, a major cryptocurrency exchange, a prominent crypto influencer, or a celebrity is hosting a giveaway.
Unlike the conventional method of participating in crypto giveaways, which requires participants to join a community and complete some social tasks, these scams require you to send a certain amount of cryptocurrency to a giveaway address to enter the giveaway, verify your wallet address before claiming your share of the giveaway.
Their goal is to scare you into making a bad decision by convincing you that you are about to miss out on a huge opportunity. However, if you fall victim to one of these scams and send money to the scammer's address, the transaction is final, and you lose access to your funds and, worse, your crypto wallet.
Top Giveaway Scam
Various types of giveaway scams target cryptocurrency users, and new and experienced users can fall victim to them because they always appear genuine. These are some of the scams:
Twitter Impersonation Scam
This is the most common type of giveaway scam, where the scammer poses as a well-known public figure in the space, offering to give away a large amount of cryptocurrency in exchange for a smaller amount first.
Users fall victim to this scam because the scammer impersonating the public figure always has the Twitter verification check mark (bluetick) of the account being impersonated. As a result of the urgency associated with the giveaway scam, a naive user will be unable to distinguish between the real account and the imposter.
Youtube Livestream Scam
YouTube live streaming is another new technique scammers adopt to carry out their fraudulent acts. In this case, the scammer will create a YouTube video using older video streams of cryptocurrency exchange CEOs and overlay it with information about a supposedly free giveaway.
However, the fraudsters avoid YouTube's content review process by using the Live feature until the video is over so that it appears to be happening at the moment, enticing viewers to participate in the giveaway immediately. Next, they pin a giveaway address or a link to a giveaway site in the video description, where users will be asked to send cryptocurrency to participate.
Phishing is a type of cryptocurrency scam that involves defrauding victims into handing over their private keys or personal information. Scammers often create a fake website or social media profile that appears to be a legitimate exchange or wallet service and requests that users deposit funds to receive a larger amount of cryptocurrency.
Phishing scam links are usually sent as direct messages to users asking them to claim free cryptocurrency. However, regardless of how appealing the web page appears, these links direct users to a scam giveaway address that should not be trusted.
Email scams are another common scam used to steal money from users. In this case, a scam giveaway is typically promoted via email, where the scammer may impersonate a top exchange and persuade the user to participate in the giveaway to earn rewards.
Users fall victim to this scam because the email content is often similar to the brand being impersonated, making it difficult to tell the difference. Therefore, to capture their target, these scammers promise to multiply the amount used to participate in the giveaway by creating well-crafted messages with a sense of urgency.
How To Protect Yourself
Crypto giveaway scams are common on social media, causing people to lose millions of dollars in untraceable wallets. However, how do you identify these scams and avoid becoming a victim?
- Almost all crypto giveaway scams follow a similar pattern of pretending to be someone else and requesting cryptocurrency before sending you more. So, if you are asked to send certain tokens or money to "claim" a giveaway, this is a scam. Giveaways are free or almost free to the recipient unless you are on a whitelist and must participate in a private sale.
- As with social media scams on Twitter and YouTube, the best way to avoid becoming a victim is to be diligent and conduct research on the person attempting the giveaway. Check the profile verification, number of followers, account creation date, and most recent post.
- If it's too good to be true, it certainly is. Especially when you receive exciting giveaway offers in your email, don't click the links too quickly. You could be a phishing target.
- Maintain your cool when you see giveaways and contests with a sense of urgency. More often than not, they are scam giveaways.
Click here to learn about other types of crypto scams and security measures to follow.
Crypto giveaway scams have evolved into an illegal market segment with various approaches for facilitating fraudulent operations and stealing users' funds. As a result, these scams are mostly aimed at newbies who want to earn more cryptocurrency and thus fall victim to the giveaway scam.
However, if you notice a crypto scam or someone tries to scam you with a crypto giveaway, do not panic and follow the steps outlined above to avoid losing your hard-earned cryptocurrency.
Remember, it probably is if it sounds too good to be true. Consider your options carefully before sending your crypto, as transactions are irreversible, and you will not be able to recover your funds.
Check the Cwallet Blog daily for articles that help you understand cryptocurrency and blockchain technology tenets. Join us on telegram for more information.
Cwallet does not charge any deposits, withdrawals, and token swap fees. Therefore, using Cwallet is absolutely FREE!
So, what are you waiting for?
Download Cwallet NOW.
Don't hesitate to contact us directly via Telegram or Discord for any suggestions or queries. You can also drop us an email, and we will gladly assist you!