Don’t Fall for This YouTube Cryptocurrency Scam
If you’ve ever made the mistake of looking for “crypto” on YouTube, you’re probably still being bombarded with ads about how to make money with digital currency. You will be shocked to learn that not all of these offers are up to the mark. One new trend has been gaining momentum lately, called “the edge”, according to which you can earn up to $1,400 per day from passive income with cryptocurrencies. It’s also a great way to get scammed.
A new report from blockchain security company Certik found that of 232 YouTube videos with the phrase “bot working ahead” in the title, 84% were fraudulent , six times more than in 2021. To understand how this method is used to trick victims into handing over their cryptocurrency, we first need to understand what preemption is.
What is the cryptocurrency front?
The description of the lead can quickly become technical, especially if you’re not familiar with cryptography. But in layman’s terms, the attackers are at the forefront, waiting for the victim to make a cryptocurrency transaction, which they intercept by paying more “gas fees” (which determine the speed at which the transaction is processed on the blockchain) than the victim. This puts them ahead of the transaction queue. After the leader buys the cryptocurrency before the victim, the price of the cryptocurrency rises (because there is less of it). The leader then immediately sells the newly purchased cryptocurrency at a higher price once the victim’s slower transaction occurs and the leader makes a profit. The victim has less cryptocurrency left than they expected because the price has risen in the last moments.
Leading in the crypto market is similar to a similar pattern in trading in the stock market. The difference is that a leading move in the stock market depends on the schemer having prior knowledge of an upcoming big deal that will increase the value of the stock, commonly referred to as insider trading. Crypto, on the other hand, uses the underlying technology of the currency itself , using pre-programmed bots that act at millisecond speeds after a transaction is publicly announced on the blockchain but before it is actually executed.
Here’s a visual representation from Certik’s report on how crupto front-running works:
So what’s the scam here? Shady leaders say they have “insider knowledge” about which crypto assets will appreciate and when. They “teach” others to be proactive by having them install some code that will do all the work, thereby generating passive income. (Of course, in crypto, as in the traditional stock market, this kind of insider trading is illegal, according to the Securities and Exchange Commission .) And that’s when the scam kicks in.
How does cryptocurrency scam work?
Victims are lured in with the promise of easy passive income, as explained in compelling YouTube videos from “crypto gurus” that show them how to run preemptive code on their computers.
But instead of helping the brand earn passive income, the code is actually a front for malware. Once you copy it to your computer, you will be vulnerable to surveillance by a scammer who will tell you to allocate funds to be “traded” on your behalf. But all you will do is give your cryptocurrency to scammers.
How to protect yourself from crypto scammers
If you can’t read code, never run any code unless you have complete trust in the person who provided it to you (and that trust shouldn’t just be based on watching a lot of their YouTube videos.
It also goes without saying that if something seems too good to be true — like making over $1,000 a day in passive income from just copying and pasting a few lines of code — it probably is. Any promise that this or that trading strategy or method will guarantee high profits with very little effort should make you suspicious.