Why Are There So Many Facebook Crypto Scams?

On a positive note, the value of crypto scams in 2023 is down compared to previous years, specifically showing a reduction of 77% since June 2022 and an even larger decrease from 2021.

However, this decline doesn’t appear to be solely attributable to social media platforms meticulously safeguarding their users. Rather, it is tied to the overall negative market sentiment and the impact of the crypto winter, which has driven investors away from crypto and pushed prices.

When prices are on an upward trajectory, the potential for scam-related revenue also rises due to the heightened enthusiasm and the fear of missing out, which make crypto investors and users more susceptible to the pitches of scammers.

Uncovering the Root Causes of Facebook’s Crypto Ad Scams

In recent years, the proliferation of crypto scams and fraudulent activities has surged, prompting governments and scam victims to ask for a definitive explanation and effective solutions to combat this unending battle—especially in the context of Facebook’s involvement.

Facebook acknowledges there are issues concerning ad scams. It originally tried banning crypto ads altogether but gave up on that initiative quickly. It says it uses Artificial Intelligence for detecting and eliminating illicit ads. It also implemented new regulations in 2021 mandating that crypto companies obtain approval from Meta before advertising. Yet, despite these measures, crypto ad scams persist, as fraudulent advertisements continue to rear their heads.

The following are major contributing factors in the prevalence of crypto scams.

1. Proliferation of Fake Verified Accounts

We are all familiar with the blue checkmarks, or verified badges, that adorn the profiles and pages of influential celebrities on social media platforms like Facebook. These badges signify the authenticity of the account; however, they can be deceitfully acquired for a mere $8.

2. The Growing Ingenuity of Scammers

Employing spam bots and account impersonation techniques, and leveraging the buzz around artificial intelligence, scammers are pushing the boundaries of what’s achievable. Consequently, various celebrities, businesses, and even governments fall victim to these types of fraudulent activities. To put things into perspective, crypto-related scam losses amounting to $133 million have been reported since 2021.

The existing screening mechanisms and strategies must become more adept at countering the inventive tactics of hackers. As evidence of this, scammers have even succeeded in impersonating the Meta Ads account, as evidenced by incidents on Twitter.

Source: Twitter

3. The Absence of a Centralized Authority

A multitude of battles surrounding crypto regulation, fraudulent transfers, and money laundering persist. Nevertheless, a singular entity or centralized authority capable of flagging suspicious transactions or pre-empting these frauds is notably absent. What is indisputable, however, is that crypto transactions are irreversible. On a positive note, progress is being made, with financial services advertisers now required to be authorized by the FCA in the UK to target users, signifying a step in the right direction.

4. The Crypto ‘Community’

Active engagement is pivotal for cultivating a thriving community. However, this engagement can be misleading and deceptive, especially if fraudulent accounts fuel crypto hype and post fabricated reviews and content on social media. From this point, it’s a slippery slope towards crafting deceptive ads and engaging in scams—a recipe for a catastrophic outcome.

5. Deficiency in Crypto and Financial Education

The accumulation of factors paints a comprehensive picture. Misleading promises in crypto ads coupled with limited understanding of crypto and financial matters result in substantial losses. Accountability is elusive in this scenario, perpetuating a vicious cycle that needs to be broken.

What’s The Future of Crypto Ads on Meta?

The trajectory of crypto ads on Facebook remains uncertain, considering that this platform remains a breeding ground for a multitude of scammers. Nonetheless, for substantial improvement, changes must extend beyond the realm of social media platforms alone and encompass global initiatives.

Crypto enterprises wanting to promote their ventures should explore an alternative route to Facebook, and engage with a dedicated crypto ad network. Tailored for the cryptocurrency industry, these platforms offer optimal practices for driving traffic and revenue. If you’ve encountered rejected ads without clear reasons or encountered incomplete campaign metrics on Facebook, it might be worthwhile to cast a wider net and explore the top ad networks.

Final Considerations

Moving forward, there is limited scope for addressing the prevalent scamming practices within the crypto sector. However, several measures can be adopted by users and social media platforms to mitigate the impact.

For instance, implementing multifactor authentication is a viable means of protecting accounts. Additionally, instituting a patch management system aids in identifying and rectifying security vulnerabilities, thereby reducing overall susceptibility.

Given that viable options exist and potential positive changes are on the horizon, users should exercise due diligence by verifying facts, steering clear of clickbait ads, and subjecting seemingly too-good-to-be-true offers from crypto companies to careful scrutiny.