Crypto Market Scams: How AI and Social Media Take Advantage of Investors.
When FTX’s former CEO Sam Bankman-Fried was jailed, earlier this year, after being convicted on fraud charges, many in the crypto industry breathed a sigh of relief that the industry could turn around after years of scandal. But scandals continue to plague the property group, and there are some signs of recovery in the market rebounding this year.
It’s not just fake headshots and misleading websites: fraudsters are apparently trying to masquerade as legitimate with fake news stories about venture capital fundraising and fake news about partnerships with big businesses. In some cases, misinformation fell on credible agencies.
The funding reportedly raised $12 million from investors led by Binance, the world’s largest crypto exchange. On their websites, they also claim collaborations with other big names in the industry like Polygon, Avalanche, dydx, and Fantom.
“It’s fraudulent, especially if you set up these websites,” said PitchBook crypto analyst Robert Le, who pointed out that InfinityStakeChain and FlexyStakes are a group of crypto startups peddling fake information about raising money.
The motivations of FlexyStakes and InfinityStakeChain are unknown. Le said Pitchbook, which tracks venture-capital data, has noticed a recent surge in fraudulent activity in the digital assets space. He added that some businesses are just plain scams whose fraudulent fundraising reports could lure them away .
“They just want you to come to the website, connect your wallet and use the product, and get all your money,” he said. “We see a lot of fake businesses that raise funds and will put out fake news stories. I see him almost every day.”
Fraud can happen at an alarming rate. On Monday, Tether Holdings Ltd. raised its stock price by 1.3%.
When it comes to InfinityStakeChain and FlexyStakes, Eberl wasn’t the only one whose headshots were abused. He also saw two other faces, including the alleged founder of both companies. Eberl studies communication and misinformation about politics and health, and now focuses on public reactions to Covid-19 policies in Austria. They discovered the pair from the X social-media platform when they both posted about Covid programs in Austria.
The incident troubled Eberl, although he is used to hate speech and bullying online about his research. His wife recently watched the Netflix documentary Bitconned and was worried that a crypto scam would
Above all, they were concerned that she had engaged in any fraud that might damage her reputation and harm unsuspecting victims.
Several data reporting channels, including Crunchbase, Pitchbook, and Silicon Valley Journals, incorrectly reported that Candle Labs had raised $48 million in Series B.
Suspension of reality
“It’s characteristic of being a startup founder here in Silicon Valley, where I do, that people have a lot of arrogance that borders on giving up reality,” Royce said.
The lawsuits against Elizabeth Holmes and Theranos, which are launching blood tests, have raised the question of how far the founders can go.
Conclusion: As AI and social media evolve, so do crypto fraudsters’ tactics. Self-education, vigilance, and advocating for stronger regulations are important steps to protect investors and promote safer crypto market knowledge.