Crypto racket: ‘Crypto scam’ sneaks into online K-pop fan clubs with ‘giveaway’ contests

Two weeks ago, a Mumbai-based fan of the Korean pop (K-pop) band BTS realised that she and her connections had been inadvertently following a cryptocurrency account on Twitter.

Over the next few days, cryptocurrency-related posts began to show up on the timelines of ARMY—Adorable Representative MC for Youth, the term associated with millions of BTS fans.

The BTS fans also noted that quite a few cryptocurrency accounts were being tagged in ARMY giveaways or rewards provided to users selected at random, including albums or merchandise worth $25 to $250 on average—a common practice among K-pop fan clubs. They figured that certain ARMY giveaway hosts were asking them to also follow cryptocurrency handles, without providing any guidance on its potential risks.

It soon became obvious that targeting the youth had been a masterstroke as the crypto community itself is dominated by Gen Z and millennials.

Crypto could really use the credibility of a huge following comprising young and active users, especially in an environment where digital currency is in a legal grey area across the world.

An ET investigation revealed that a bunch of these cryptocurrency accounts in India and abroad had been able to penetrate genuine Twitter handles or influence the influencers within communities like gaming and K-pop fandom to divert their followers to their accounts.

Twitter quickly moved to block crypto accounts on the grounds that they had been using inauthentic means to inflate their followers and amplify content.

Smells Like A Scam

Twitterati among the ARMY stumbled upon the scam when some younger members said they had been receiving calls from various countries after clicking on certain giveaway links.

“On digging deeper, we found some of the highly followed ARMY accounts had sold their accounts to what seemed like shady cryptocurrency accounts,” the Mumbai-based ARMY fan who was following one such suspended account said.

The ARMY account’s username, handle, display picture — all had changed to match the crypto vibes.

All ARMY-related posts had been replaced. What remained were posts on crypto, for crypto, and by crypto folks.

Buried under 6,000-plus crypto tweets of the last two months was one BTS-related retweet from 2019, the only thing that could prove it had once been an ARMY account.

As is the case with most scams, a pattern started to emerge.

The few ARMY accounts hosting crypto-sponsored giveaways were all hyping each other up and urging their followers to engage with the same set of crypto accounts. If they asked fellow ARMY to also follow their new backup accounts, it meant their main account would turn into a crypto account soon.

When ARMY members started questioning these crypto accounts, most either blocked their critics or temporarily deactivated the accounts. Some ARMY accounts, meanwhile, admitted to taking commissions for crypto giveaways and apologised.

After ET flagged some of these suspicious accounts, Twitter suspended them overnight. “We’ve taken action on a few thousand such accounts for attempting to inauthentically inflate their following and amplify content,” a Twitter spokesperson told ET.

“If people see suspicious activity, the most important thing they can do is report it to us,” the spokesperson added.

Speaking of suspicious activities, a lot of the crypto accounts that the compromised ARMY promoted also had an ‘egg’ emoji in their Twitter bio and username. It’s a mystery we could not solve and decided to file under the dark internet subculture.

Giveaway Or Take Away?

Between 2015 and 2018, the internet was rife with giveaway marketing stunts.

Called airdrops, these distributed free crypto “coins” and “tokens” as part of an ICO (Initial Coin Offering), an IPO-equivalent for crypto — to promote virtual currency.

Many were eventually revealed to be scams.

A lot of these airdrops were just Ponzi and pyramid schemes set up to create a crypto bubble, experts told ET.

“Giveaway projects are typically used as growth hacks where every retweet can fetch a 0.01% extra return, say 400 retweets in return for 100 extra coins. They take different formats such as simple meme competitions or follow-back initiatives on Twitter,” said Ramani Ramachandran, CEO of Singapore-based blockchain firm ZPX.

Be that as it may, the community is split on the matter, he added, and five out of 10 traders would tell you that a giveaway project is a growth hack and not a scam.

Nonetheless, in 2018, Twitter announced guidelines prohibiting any form of crypto ICO advertisements on its platform.

This time around, however, crypto evangelists reckon that the giveaway scam may not be about cryptocurrency at all. That has made it an even bigger worry.

“Scamsters may be looking at youngsters in highly-engaged communities such as gaming, football or K-Pop because they are easier targets,” said one crypto evangelist on condition of anonymity.

Why Easier Targets?

A typical scam would involve a link that takes the victim to a third-party website, where it may use a three-pronged approach depending on the type of scam.

One, it may seek a young user’s credit card or crypto wallet details for potential phishing attacks. Two, their personal details for potential hacking attempts. Three, they may wrongfully charge a subscription fee to dupe young users.

The most innocuous result of this would be when scamsters — who work in tandem — announce a winner from their own group after amassing a huge following through a giveaway alert.

The malicious result is when they hack into a user’s system, gain access to remote devices and use that for blackmail.

In fact, in the words of one frustrated ARMY member: “Ever since we have called out these suspicious giveaway accounts, they have created new accounts and are harassing and calling for blocking of legitimate ARMY accounts. This is happening to other K-pop fan communities as well. We are being targeted for refusing to let them (crypto accounts) use us! We don’t want to be dragged into this. We just want our space back.”

One-Trick Pony

The shadowy crypto accounts had missed a trick, though.

Little did they know that BTS fans adhere to an unwritten commandment: “Thou shalt not make money off BTS.”

“I’ve noticed this common wariness among hardcore ARMY that people are always out to take advantage of ARMY clout and make a quick buck. It’s amazing how strict they are about discouraging this,” said an ARMY fan from Hyderabad who is in her 40s.

In June last year, when BTS donated $1 million to the Black Lives Matter (BLM) movement, its loyal fan club matched that within a day and donated to the cause.

“Our BLM donation made news everywhere. Maybe these crypto guys got greedy and thought it would be easy to make a quick buck out of us,” said another Indian-Canadian ARMY fan in her late 30s.

In fact, last week, 34 of the most prominent ARMY fan bases from around the world got together on Twitter to warn gullible ARMY members against these sponsored crypto giveaways, even urging caution with self-funded and ARMY-funded giveaways as well. They also requested members to unfollow and block suspicious accounts.

“We have never nor will we ever partner with/participate in/promote/or host sponsored giveaways,” they said in a statement.

Twitter urges users to be more vigilant and report suspicious accounts.

However, those at the receiving end of these scams look at this as a cop-out on the platform’s behalf and question why they should carry the burden of moderating bad elements.

The Indian cryptocurrency community, too, must call out the bad actors and actively discourage low-quality crypto assets, said Nitin Sharma, partner at Antler Global and previously the founder of Incrypt Blockchain.

Over the past two years, there has been a steady traction towards a flourishing crypto community in India, even though it is still not the most mature or advanced cryptocurrency market in the world like the United States, Russia or Japan.

Recently, the Supreme Court overturned a banking ban on trading crypto assets, triggering a massive influx of new sign-ups and trading activities. But the government is mulling a ban on both the trading and holding of all forms of cryptocurrency.

“We firmly believe that the government will sooner than later move towards regulation of cryptocurrency in India rather than banning it altogether,” said Nischal Shetty, founder of leading Indian cryptocurrency exchange Wazir X and part of popular cryptocurrency campaign #IndiaWantsCrypto. “We want to ensure that when the regulators come, it’s a cleaner ecosystem than a dirty one to govern and supervise.”

(Illustration and graphics by Rahul Awasthi)