The Rise of Crypto Scams

Written by: Tan Ken Shin (22-A2)

Designed by: Shervonn Tan (23-E6)

The dictionary definition of cryptocurrency is a digital or virtual currency that uses cryptography to secure and verify transactionsCryptocurrencies are primarily based on blockchain technology, which records all transactions. It is also largely used for payment, investments, and storing an asset to be sold at a higher value later. However, the cryptocurrency market faces the risk of high volatility savings that could easily crumble overnight.

Unfortunately, in the world of crypto, scams are prevalent due to the majority of transactions occurring over the internet. For example, phishing and false investments are a few notable types of scams that run rampant in the crypto world

For phishing, scammers usually create false websites, emails, and pages to mimic legitimate transactions. Once users provide important credentials such as credit card information, scammers use such information to rob the user of their cryptocurrency. 

For false investments, scammers create projects that appeal to investors, such as promising new technology, but once sufficient funds have been inputted, scammers would simply flee with all the invested currency. 

However, it is important to note that these are just two of the countless types of crypto-scams that exist 

A stellar example of a recent large-scale crypto scam would be the OneCoin incident. 

OneCoin was a cryptocurrency scam in operation for 4 years, between 2014 and 2018. Upon its introduction, the founder, Ruja Ignatova, preached that OneCoin would be the successor to the cryptocurrency giant BitCoin, and promised investors high rewards for investments. 

It was later revealed that OneCoin actually did not even have a functioning blockchain, or any real-world value, and Ignatovafled with millions of people’s investment funds She remains at large today for wire fraud, securities fraud, and money laundering. This resulted in the vast majority of investors losing unfathomable amounts of money on this scam, resulting in great deals of distress and paranoia regarding crypto investments in the years to come. 

This incident highlights just how important it is for users to be diligent with matters concerning cryptocurrency. If users had done the research and unstable operations OneCoin ran behind the scenes, such a massive scam could have been prevented.

Crypto scams not only impact the economic sector but also the cultural sector. Celebrities may fall for such scams, resulting in detrimental effects

Celebrities are the target for corporate sponsorships to promote their products, crypto scammers may disguise themselves as reputable organizations to gain support from these celebrities.   Celebrities may fall for such scams and when the scam is outed for fraud the celebrities who have promoted the scam, are often seen as a culprit or supporters of the scam, resulting in them having to bear the criticism that follows. This would significantly affect their publicity and business.

A prime example of this would be the recent Ishowspeed incident which happened just last year in 2022. 

IShowSpeed is a cultural icon on the social media platform YouTube, with his personality and content earning him millions of subscribers and viewers on his videos. Speed skyrocketed to success in 2022, and all seemed well until he decided to partner with a crypto company known as Paradox Metaverse. 

During a fateful livestream, he was sponsored by Paradox Metaverse, causing him to have an obligation to promote their currency multiple times throughout the stream. He even went as far as to wear a shirt that read “By Paradox crypto coin”, worn by every member of his team involved in the video. 

Under the watchful eye of about 2 million viewers, after the live stream, a few keen eyes did some research and eventually called out Paradox for being a scam and urging Speed’s community not to invest in it, especially on Twitter, a social media platform that Speed actively uses. Unfortunately, the warnings did not come out quickly enough and a significant portion of his audience had already put their funds into Paradox, believing it to be credible because of Speeds promotion

This resulted in a massive outrage against Speed, where both people in and out of his community turned against him. To add salt to the woundSpeed’s audience had a significant proportion of teenagers and young adults, putting Speed in an even worse position. 

After countless Twitter apologies, Speed finally took the topic to video, and filmed a heartfelt apology to the masses. The event has also greatly affected Speed’s following, causing him to lose a whopping 5% of his subscribers.. Moreover, people still bring the situation up in recent times in an attempt to ‘cancel’ the creator. 

This has shown that any negligence towards scams by influencers has great impacts not just on the masses, but also on the influencer’s legacy and reputation. In Speed’s case, the masses suffered huge losses, and Speed’s reputation remains associated with and damaged by cryptocurrency scams. 

In light of this situation, we as a society can take measures to counteract the rise of crypto scams. 

Firstly, we should be extremely careful about where we put our money.  We should do thorough research on the background and legitimacy of a company before deciding to invest in them. 

Secondly, we should not place blind faith in celebrities and influencers. To believe in the credibility of a crypto-currency solely because someone we deem credible promoted it is not ideal and we have to remember not to trust everything we see online.

Thirdly, we can do our part to inform more people about the rise of crypto scams as well as prevention measures we can take.  to This ensures fewer people will fall for the scams due to the increased awareness and education on crypto. 

Finally, the optimal way to avoid being scammed is to not invest your money into anything online if you can help it. Outside of career reasons, it is unlikely an average person like us would find ourselves in a situation where we have to invest in cryptocurrency. By eliminating the desire to do it in the first place, one can avoid falling victim to such scams. 

All in all, we should be more perceptive and think more critically when using the internet, especially where money is concerned. In today’s ever-so-digitalized society, internet trolls, and scammers lurk every corner of the web, and so we must do our part to keep the internet safe or at least, to help minimize the damage it would cause to the lives of other people.