Join NexChange - the professional
network for the financial services
industry - and receive a free one-
year subscription to Forbes
Bitcoin Scams Being Advertised on Twitter Through Fake Elon Musk Profiles and Other Verified Twitter Accounts
Off the back of news that cryptocurrency scams are on the rise on Twitter, with Elon Musk impersonators hijacking verified Twitter accounts to promote bitcoin scams, I wanted to see if you might be interested in commentary from experts in the blockchain space on the importance of regulated and legal avenues of investment in driving the mainstream adoption of crypto?
While Twitter has banned cryptocurrency companies from advertising on its platform, scams including the use of hacked Verified Twitter Accounts continue to run rampant, highlighting the vacuum in effective regulation which had led to market manipulation.
Additionally, the viral nature of social media propagates the herd mentality, which extends beyond traditional investment products to cryptocurrency investing, further underlining the need for companies to provide a regulatory safe harbour to potential investors which will instil confidence and help drive mainstream adoption of crypto.
See comments from experts on the topic below
Brent Jaciow, Head of Blockchain Affairs at music data tracking platform Utopia Music, commented:
“While many cryptocurrency and blockchain projects have noble causes, there are many which are today being formed in order to defraud investors. Sadly, the reason which makes cryptocurrency projects so attractive, namely the ease of starting and listing a trading vehicle, is what also makes them so prone to scams.
For this reason, if cryptocurrencies and markets are to gain mass adoption, they must first win back investors’ trust and this can only be done through having higher regulatory standards for offerings.
Yes, it is true regulated offerings will be a bit more expensive to bring to market than utility token offerings, but they carry much higher regulatory scrutiny, transparency, and consequences for issuers who are found to have bad intentions. A larger burden? Absolutely. But the cost is well worth it if it leads to increasing investor adoption within the cryptocurrency markets and benefits the entire crypto ecosystem.”
Robertas Višinskis, Founder of Mysterium Network, the open source, not-for-profit foundation reinventing internet privacy, security, and freedom, commented:
“While regulation is fundamental to the mainstream adoption of cryptocurrencies, I believe it is also important for us to be aware of the dangers of overregulation. Overregulation not only stifles innovation, but it also inhibits freedom of speech on social media — it is imperative for there to be avenues for citizens of countries where internet censorship is rampant to participate in this new economy without vilification.”
Craig Mc Gregor, CEO and Co-founder of DSTOQ, a licenced, borderless stock exchange allowing for peer-to-peer trading of tokenized securities, said:
“In a world where our financial well-being is increasingly dependent on technology, the hijacking of verified twitter accounts, including that of Elon Musk, illuminates the need for surety and security, not least in having safe investment options. The evolution of blockchain presents society with a whole host of options for the new economy that help bypass many existing dangers when making financial decisions. Licensed decentralized crypto exchanges are one such obvious, legally compliant, secure investment alternative with real disruptive potential.
By removing the need for a third party, decentralized exchanges allow users to have more control over their transactions and full ownership history of the issuer’s assets are stored on the blockchain. Over time, I believe users will experience increasing ease-of-access to the growing ecosystem of compliant decentralized financial tools. We live in an era where control over one’s own information is more important than ever, and we have the capacity to act to protect it today.”
Frank Wagner, CEO and Co-founder of INVAO, a blockchain asset pool for investors based on automated trading and active portfolio management, said:
“This unfortunate occurrence of bitcoin scams being advertised through verified Twitter accounts shows the increasing need to establish well-considered safeguards around blockchain and for investors to be informed about the best avenues of entry into the crypto market. As awareness of blockchain gathers momentum, it is important that compliant projects are not overshadowed by the scandals which occur, as this will stall the development of the blockchain ecosystem as a whole.
Increased attention from mainstream investors should bring more clarity to the sector, and help to distinguish which projects are sustainable and worthy of investor trust. This in turn will lead to a better understanding of investment in blockchain projects, and to fewer investors being taken in by scams such as these.”
Casey Kuhlman, CEO of Monax, an open-source blockchain platform for smart contract technology, said:
“With blockchain technology and smart contract capability to verify identities and authenticate funding applications and requests, we have more potential than ever to eradicate scams, hacks, and criminal activity. The lesson from recent events – with Elon Musk’s verified Twitter account being hijacked for Bitcoin scams being just one such example – demonstrates the lack of security offered by traditional technology and the need for alternative methods of verification.
As a world increasingly relying upon technology, we must adapt to safer, more effective methods of conducting business and everyday interactions. It is important to note that hacking is not exclusive to cryptocurrency, with people the world over subject to duplicitous actions on a daily basis. Blockchain is a workable, scalable solution to a real-world problem.”
“Traditional venture capital (VC) investment in blockchain and crypto firms came close to tripling in the first three quarters of 2018, an indication of the maturation and the growing confidence in the space despite the regulatory uncertainty. While steady progress is being made, the industry sorely needs a robust regulatory framework to allow the sector to evolve past its current problems, one of which is the variety of online scams.
Instances of crypto scams such as the hijacking of Tesla founder Elon Musk’s verified Twitter account further underlines the importance of having proper legal investment avenues in place. The reality is, those behind these hijacking efforts have identified this as a solid strategy to swindle users out of their own money. Proper frameworks and a strong focus on education is needed to ensure the investment decisions of online users are well-informed and the process secured, as opposed to purely speculative and senseless. A clear regulatory landscape can help to mitigate the risk of such twitter scams, while also broadening the understanding of the technology among the wider crypto community, as well as those on its periphery.”
This article was originally published in ValueWalk.