Researchers uncover massive crypto scam network through X’s Lists

San Diego State University researchers have tapped artificial intelligence to identify and track an enormous network of cryptocurrency giveaway scams on X, the social media service previously known as Twitter. In developing GiveawayScamHunter, their system identified 95,111 scam lists created by 87,617 accounts between June 2022 and June 2023 – that’s an alarming amount of fraudulent activity.

The researchers have followed these scams through an automated system, obtaining valuable information, including the website and cryptocurrency wallet addresses that link to the fraudulent operation. As a result, they could reveal 327 scam giveaway domains and 121 cryptocurrency wallet addresses associated with these illicit activities.

The researchers found that the scammers exploited the lists feature of X, a networking feature used often for group accounts. Because the lists feature is permissionless, it eventually became an easy way for scammers to network and successfully scam unsuspecting victims. To solve the problem, the team trained a state-of-the-art natural language processing tool on data from previously known scams and thereby identified nearly 100,000 more hitherto unseen scam lists.

“By tracking the transactions of the scam cryptocurrency addresses, this work uncovers that over 365 victims have been attacked by the scam, resulting in an estimated financial loss of 872K USD.”

This study highlights the evolving nature of the scam that the scammers adapt to target the victims and the dangers that might be lurking behind apparently harmless features of social media. From the full data that they had collected, the scientists were able to enlighten the scale as well as mechanics of the scams in question, thereby making an impression of how the scammers work and the sophistication level involved.

The researchers noted that despite sharing their findings, which comprise accounts, domains, and wallet addresses, with both X and the broader cryptocurrency and blockchain communities, as of August 10, the date of publication of this paper, 43.9% of accounts involved in scamming activity remained active. However, they clarified most of them are probably either inactive or spam accounts rather than being used to commit fraud.

This study, therefore, throws in stern warning that risks lurk within the cryptocurrency world, especially on social media sites, where it is exposed to widespread attacks by different users. At the same time, the motivation of efforts to mitigate the impact underlined by the persistence of a colossal number of accounts involving scams outlines a need for vigilance in every line of both the social media and cryptocurrency sector.