Investment fraud: Crypto, social media and communication

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The increased public knowledge and interest in new technologies, particularly cryptocurrencies, has created new fields of investment and research. Genuine pioneers in these emerging fields have reaped the financial rewards. However, wherever there is public interest, fraudsters will see opportunities to boost interest in their false products.Fraudsters are quick to pick up on investment trends and create new companies to capitalize on them. This has been seen in property development booms and green initiatives, such as carbon credits. From 2021 to 2022, the number of investment frauds reported went up by over 10% and the losses by over 30%. Cryptocurrency investments form a part of this upward trend.Some of the hype around cryptocurrency investment, particularly away from traditional news media, has been about the getrich-quick success stories, where the value of a cryptocurrency multiplies overnight. This can happen when an investor gets in at, or before, an initial coin offering (ICO). The value of this to a criminal is that the cryptocurrency need not be available on the market, listed on an exchange, or potentially even functional.On top of this, fraudulent investment companies conduct their own advertising campaigns, create glossy brochures and use all other marketing tools at their disposal, just like any other company. This gives them huge reach and near-borderless access to potential victims. This scale and corporate veneer can make it difficult for customers to spot a criminal company among credible vendors in the marketplace. The influence of social media has risen sharply in recent years. Several social media outlets are gaining traction as the sole means by which young people access the news and conduct research.Studies have shown that a large number of 18-23 year olds are actively investing based on advice found on social media, and that half of these investments start with crypto. An online search reveals numerous articles from various sources discussi