A report reveals a new network of culprits in the lucrative crypto fraud market using videos, channels and web apps.
Helsinki-based security firm WithSecure has unearthed a kudzu-like network of fraudulent content aimed at getting people to invest in fake cryptocurrency investments.
Run by what WithSecure characterized as a group of about 30 threat actors, the network encourages participation in web-based apps masquerading as investment programs using the cryptocurrency Tether. The company estimated that the rogue apps it discovered could generate just over $100,000 in revenue from about 900 victims.
How the YouTube cryptocurrency scam works
WithSecure, which collected data for the report in the second half of 2022, claimed the culprits distributed thousands of videos that garnered viewer engagement across hundreds of YouTube channels.
The group uses Telegram, a vector provided by the Keona Clipper malware as a communication channel last June and employs copy-paste automation to add comments to the videos to disguise them as legitimate, according to the security firm.
The researchers found 700 URLs hosting fraudulent web apps linked to videos and offered by the network, but parallel data from cryptocurrency wallets “implied the possible involvement of thousands of others,” the report said.
TO SEE: FBI Warns About Fake Cryptocurrency Apps Aimed To Steal Money From Investors (TechRepublic)
According to the report, victims transfer money from an existing one cryptocurrency wallet to any of the apps in a single transaction. The researchers said there was no movement of crypto back to the victims (Image A).
Victims are required to create an account in the advertised app that comes as web pages, mobile applications or even automation that interacts with users on Telegram. The victim is then required to deposit a small amount of money into the app – tens of dollars, which is immediately snapped up by the scammers.
WithSecure said many of the videos encourage victims to invite friends and family to join, with a small fee for each person invited. The apps also include bonus “VIP” structures that unlock better “investment” options with higher returns. These call for a larger down payment.
TO SEE: Visa splits $9 billion investment in security and fraud initiatives (TechRepublic)
“This network seems to be targeting existing cryptocurrency investors with low-quality videos in different languages without localizing them to reach different regions, so I would say it is quite an opportunistic approach,” said Andy Patel, researcher at WithSecure Intelligence. “Usually this results in a large number of small transactions.
“But as that volume increases, so does the likelihood that they’ll get lucky and find someone who is able and willing to invest larger sums.” (Figure B)
He said the dark picture, despite the scam’s relative unprofitability, is that the scammers have abused YouTube’s recommendation algorithms and that description fields associated with the videos also use a unique style of SEO designed to exploit YouTube’s search functionality. to abuse.
“Moderating social media content is a huge challenge for platforms, but the successful amplification of this content using fairly simple, well-known techniques makes me think that more can be done to protect people from these scams,” said Patel in the report (Figure C).
FTC: Crypto scams have been posting small numbers, but lucrative in total
That’s what the US Federal Trade Commission said in a June 2022 memorandum crypto proves a lucrative scam channelwith over 46,000 people reported to have lost a total of over $1 billion in crypto to scams since 2021.
The note stated that cryptocurrency was identified as the method of payment for 24% of reported dollar losses in fraud reports to the FTC, and that the average individual reported loss was $2,600. The top cryptocurrencies people used to pay scammers were Bitcoin (70%), Tether (10%), and Ether (9%).
Crypto scams to watch out for in 2023
Financial software company Abrigo, in a Report 2023repeated FTC warnings about nine more crypto scams institutions and individuals should watch out for this year:
- Romance Scams: Prey on relationships and can have both an investment and payment angle. In a recent remarkthe FTC reported that nearly 70,000 people reported a romance scam last year and reported losses totaled $1.3 billion, with a median loss of $4,400.
- Business, government or job impersonation: Threat actors present themselves as trustworthy online sources and convince users to send them money by purchasing cryptocurrency.
- Back pull scam: Investment scammers are proposing a new crypto opportunity or NFT that requires funding.
- Phishing: Emails (or “smishing” texts) contain malicious links that collect details such as a user’s crypto wallet and other important information that gives access to the victim’s cryptocurrency.
- Social media scams: These start with an ad, post or message on social media, especially Instagram, Facebook, WhatsApp and Telegram.
- Ponzi schemes: Scammers collect money from new investors via cryptocurrencies.
- Upgrade Scams: Consumers accustomed to upgrades can easily be scammed into giving up on them private keys as part of an “upgrade”.
- Sim-Swap scam: Mobile phone SIM card theft can give access to the victim’s crypto wallet via DFA.
- Fake crypto exchanges and crypto wallets: Inexperienced crypto users may be tempted to invest in a new high-quality cryptocurrency exchange opportunity or a “cheap” Bitcoin that doesn’t exist.
WithSecure’s Patel told TechRepublic that while there are no clear business implications associated with this particular scam, “Individuals and businesses alike should always be wary of investment programs that seem too good to be true. This is especially true when considering all things cryptocurrency.”
Blockchain, for better or for worse, is here to stay. If you want to learn more about the basics of the technology behind cryptocurrency, check it out fundamentals of blockchain development.