Elon Musk’s Ethereum Scambot Headache Highlights the Importance of Using Trusted Sources for Cryptos

Followers of Elon Musk unwittingly found themselves in the middle of a crypto scam in early July thanks to a network of advanced Twitter bots. As those that follow the bite sized musings of Musk might have noticed, a stream of Ethereum-related tweets had been gradually creeping into his timeline since March. According to reports, the incident is part of a larger problem that’s seen hackers hijack celebrities’ Twitter accounts and post links to Ethereum scam sites. In the latest series of crypto messages, the bots posted messages about the current price of Ethereum as well as links to a supposed cash giveaway. While a closer look at the information gave away that the links weren’t legitimate, the dynamics of Twitter have made the ruse highly effective.

Scambots Causing a Crypto Nightmare

According to a data obtained by the Washington Post, Twitter removed more than 70 million fake accounts in May and June. The move comes as fraudsters are finding new, creative ways to jump on the cryptocurrency hype train and fleece unsuspecting social media users. For cybercriminals that found a way into Musk’s account, the system was able to make posts after the account handler wrote a post of their own. By essentially adding a rogue tweet right below a legitimate one, it looked as though the rogue tweet was also written by Musk. Indeed, because the nature of social media means that we scan information quickly and move on to something else, the bots are able to take advantage of this by using handles that look similar to the original. For example, instead of @elonmusk, the software would post something under the name @el0nmusk.

For the man himself, the posts were intriguing. In typically entrepreneurial fashion, the real-life Tony Stark wanted more information on the bots and the people running them. Quite what Musk had in mind for them and the scambot technology is unclear, but he clearly feels it could have some value if it was used in the right way. However, while the billionaire was happy to have some fun with the issue, Ethereum founder Vitalik Buterin was quick to point out that this wasn’t a network issue.

Security Under the Spotlight Since 2017 Boom

Thanks to the Bitcoin boom of 2017, the leading cryptocurrencies have become the target of more attacks. As well as scams on Twitter, smaller exchanges have been hit by hackers, while some novice users have been tricked into sending their coins to rogue wallets. Although industry insiders have been working to address these types of issues, the Ethereum scambots are another reminder that vigilance is crucial. Although cryptocurrencies and blockchains are inherently safe, the industry that’s evolving around them has its weaknesses. For many, the lack of regulation across the major cryptocurrency exchanges is a problem. Although Binance, Coinbase and the other leading brands have solid security protocols, many of the smaller exchanges are less secure.

As an investor, the risk of falling victim to a cyberattack has to be factored in. Because the majority of altcoins start life on lesser known exchanges, those that want to get in early often have to trade in less than ideal circumstances. Because of this, many experienced traders are now opting to used regulated brokers. Instead of buying the underlying asset, people are now using CFD options to trade on the price of a cryptocurrency. FCA-regulated online broker eToro offers markets for a variety of coins, including Bitcoin, Ethereum, Ripple and NEO. By aligning cryptocurrencies with traditional forex options and commodities, brokers bring a level of legitimacy to the trading market. Because these platforms have been around for the best part of two decades and operate under strict controls, they offer a safer place to invest that new crypto exchanges. For instance, eToro is regulated by CySEC and the UK’s FCA.

Crypto Collaborations Are Crucial

For investors, the advent of crypto brokers is great. However, it’s not a solution for the industry as a whole. If cryptocurrencies want to become a mainstream product and change the way we pay, manage data and more, the current weaknesses need to be addressed. Although every emerging industry has its teething problems, the rise of Bitcoin has put the crypto sector under the spotlight. Education will likely be one of the best weapons against fraud in the coming years. As more people become aware of cryptocurrencies, they’re less likely to be duped by Twitter scams. However, if the industry is to grow, it must evolve and that will mean working with other parts of the tech world. As Buterin tweeted, Ethereum needs help from Twitter CEO Jack Dorsey to tackle the bots. It’s this type of attitude that other crypto insiders will need to adopt if they want the average person to invest in their technology.

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