This week the world’s largest cryptocurrency exchange, Binance, is running a range of promotions and give-aways.
You’d be forgiven for thinking the company was providing a great opportunity for new crypto users to pick up some free coins, in reality these promotions present a very real threat to the cryptocurrency community.
That’s because for every one legitimate promotion there are a thousand or more scammers masquerading as key crypto figures and exchanges. Check the replies to any one of Binance’s promotional tweets and you will see a range of random Twitter users offering similar give-aways, with the catch that users must send a small amount of cryptocurrency to the scammers address first.
Most crypto enthusiasts are quick to spot a scam, but for those new to the space it can be a little tricky. Some figures, including Ethereum developer Vitalik Buterin have gone as far to change their online name to include a warning.
My presentation yesterday at EC18 in Cornell, covering why blockchains, fault attribution, optimal block size policy, outsourced computation, subjective oracles and more.https://t.co/kO8T2KQcIY
— Vitalik "Not giving away ETH" Buterin (@VitalikButerin) June 20, 2018
The reminder that Vitalik never gives away Ethereum isn’t a bad way to protect new investors, creating a boundary between him and the many impersonators temptingly offering handouts. Binance, on the other hand, have complicated the issue.
By creating legitimate give-aways and promotions Binance is signaling to new investors that this is normal behavior in crypto communities. It’s an action that legitimizes far more scammers than real developers, and one that should be stopped immediately.
Binance have gone some way to recognize the growing prevalence of scammers impersonating their company, warning users with a pinned tweet:
Scammers are impersonating official Binance accounts and tweeting to ask for deposits to specific addresses in return for gifts.
You will lose your tokens if you do this!
Binance will never ask you to send coins directly to any address for any reason.
— Binance (@binance) February 12, 2018
Whilst it’s a start, the give-aways Binance is running go a long way to counteract the effectiveness of this warning, potentially sending many unaware users into the hands of scammers.
To truly protect their customers, Binance should halt Twitter promotions and give-aways, drawing a clear line between the actions of legitimate online accounts and impersonators.
For cryptocurrency adoption to grow and become a mainstream and viable financial solution, we need to ensure we are protecting new investors and spreading security awareness.