In an unstable financial universe due to the inflationthe war in ukraine and the crisis of supplies, it is not surprising that figures like the ‘cryptobro’ emerge. This character, endowed with a magnetic aura and a speech full of technical jargon, operates on the fragile boundary between the advice of investment and deception. Your goal: attract inexperienced investors to the cryptocurrencya market as exciting as it is volatile.
The ‘cryptobro’ is usually young, highly versed in social networks and with an ease in navigating the cryptographic labyrinth that leaves neophytes speechless. Your greatest asset is persuasion; his eldest victimthe novice or inexperienced investor, dazzled by the promise of returns exorbitant.
“You can become millionaire in one year”, “next financial revolution is here” or “it is the best time to invest“, are phrases that are part of his repertoire. The ‘cryptobro’ is a master at omitting or minimizing the associated risks at cryptocurrenciessuch as extreme volatility, lack of regulation and the risk of total loss.
From the Santander Bank explain that, “unlike the money traditional, that is, the cash you carry in your pocket or the one you use with your Bank cards either mobile phone, digital assets are not backed by central banks or other public entities.” But the main problem is that “one of the characteristics of the ‘blockchain’ is that it does not allow deleting or altering the data in its records. Thus, once you carry out the transactions such as buying or selling the cryptocurrencies, it is not possible to intervene or cancel the operation. Simply put, there is no going back from transactions in case of scam“.
The modus operandi of digital persuasion
The presence of the ‘Criptobro’ is especially intense on platforms such as Twitter, TikTok, instagram, reddit and even specialized forums where those eager to understand the ‘crypto’ phenomenon come together. It is not unusual to find conversation threads where they defend their theses with complex graphics and seemingly irrefutable statistics. However, behind that mantle of expertise and sophistication, a well-orchestrated strategy usually hides to inflate certain cryptocurrencys in which they have already invested.
And that attempt to manipulate the market is what causes us to see influencers In any other area try sell cryptocurrencies to his followers. We talk about television personalities, gastronomy, sports… that resort to another of the psychological mechanisms that work best in social networks: FOMO (Fear of Missing Out, for its acronym in English). They take advantage of people’s fear of being left out of a unique financial opportunity, exerting emotional pressure that can lead the investor to make hasty decisions.
The scammer ‘cryptobroker’
But that’s the ‘softcore’ version. From the Santander Bank explain how a ‘cryptobro’ becomes swindler: “The criminals who seek to scam you using cryptocurrencies As bait, they can pose as financial advisors, company representatives, or celebrities. They even go so far as to create fake profiles on social networks or dating applications. Through social engineering techniques They design an investment framework with which they try to demonstrate that it is a completely legal and legitimate action. The intention is that you use your money to buy cryptocurrencies and then you transfer them or give them control with the excuse of helping you multiply your investment.
The target is clear: small inexperienced investors. Because? Well, for two reasons. First, because this ‘pyramid’ scheme assumes a base of small individual contributions; does not interest one great fortunebecause, furthermore, he probably has no need or interest in entering a such a volatile market. Secondly, because, according to the legislation that will come into force in 2024, its declaration will only be mandatory for taxpayers with balances in cryptocurrencies greater than 50,000 euros. That is to say, it is the small investors who are most interested in this tax exemption.
An interesting fact about it. At the end of 2021, there were only 1,521 filers cryptocurrencies in Spain, according to data from the Tax agency. Of them, only 29 had less than 120,000 euros in crypto assets. That is to say, those who declared them did so voluntarily, leaving thousands of small investors in the Treasury out of the radar of the Treasury. cryptocurrencies. And, of course, the scamming ‘cryptobrokers’ who operated in the shadows.
How to protect yourself?
From the Santander Bank They point out that “the best defense against this type of scam is to be alert to detect any possible sign of fraud.” Therefore, there are at least four formulas that we can use to avoid being scammed:
- Financial education: Before entering into any investment, it is crucial to understand the fundamentals. In the case of cryptocurrencies, this is even more important given their complexity and volatility.
- Diversification: Don’t put all your eggs in one basket. Diversification is key in any investment portfolio, even more so in a field as uncertain as crypto.
- Consult experts: Instead of blindly following the advice of a ‘Cryptobro’, it is preferable to consult with experts in the field or institutions with a solid reputation.
- Healthy distrust: Maintaining a dose of skepticism can be a good antidote to the persuasion tactics of these smoke peddlers.