Community Fraud Site Tracks 8.5M XRP Lost to Giveaway Scams

The Ripple Army has sent more than 8.5 million XRP to known fake airdrops and YouTube giveaway scams in the past year, according to a new community site set up to combat fraud on the blockchain.

XRP data aggregator xrplorer, which is still in beta, posted the data to Twitter on April 23, said that XRP holders had withdrawn six million tokens in 2019 and sent them to addresses associated with giveaway scams. It reported almost three million people have done the same so far for 2020.

Source: Twitter

Funds from these crypto scams ended up on nearly every major exchange, with Binance being used often in 2019 and 2020. As xrplorer noted on April 22:

“According to our data, XRP accounts associated with these “giveaway” scams are in possession of at least ~5.9M XRP with many funds laundered every day through exchanges and swap services.”

Who is xplorer?

As a relatively new source of information, it’s yet to be established how reliable or comprehensive xplorer’s data is. However, it does give some indication of the extent of the ongoing problem of fake giveaways and airdrops. Originally named ‘XRP Forensics’, the site bills itself as a "community initiative to help prevent and combat fraudulent activity on the XRP ledger”:

“There is a threat to XRP investors, disguised as well-meaning giveaways and airdrops, social media handles disguised as valued community members and celebrities, and websites disguised as official communication channels. We are building tools to help people who have been victims and to prevent others from becoming so. Time is of the essence. From the time a victim realises they have been defrauded to when they trace their funds and to when they get in touch with an exchange, the money is often long gone.”

Fake 50 million XRP airdrop giveaway on YouTube

One prominent XRP crypto scam involved a fake YouTube channel featuring Ripple CEO Brad Garlinghouse. Though the video posted was actually Garlinghouse speaking — no deep fake technology required— the link in the description involved a fake airdrop offering viewers 50 million XRP in giveaways as long as they fired some to the scammers first. 

YouTube was reportedly slow in removing the video after members of the crypto community called attention to the scam. More than 14,000 individuals watched the video and the channel had 342,000 subscribers before it was taken down.

The fake channel featuring Garlinghouse was just one of many on YouTube with XRP-related fake airdrops. Scammers have made a habit of commandeering the names, likenesses, and media of channel creators with legitimate ties to Ripple, urging their viewers to send “between 5,000 XRP and 1,000,000 XRP” to a listed address promising 5x returns.

Ripple Labs has since filed a lawsuit against Youtube in the Northern District of California, seeking damages for the platform’s failure to stop XRP scammers and impersonators.