The risk of digital currency fraud from the incident of Gree’s stolen account

Today, the news that Gree Electric's official X account (@greeqatar) was stolen and used to publish virtual currency-related information has attracted widespread attention (https://x.com/greeqatar/status/1924295822130208934?s=46). This incident once again sounded the alarm in the field of blockchain investment. In the digital currency boom, criminals have used celebrity effects, corporate brands and emerging technology concepts to commit fraud in an endless stream. This article will analyze the main scam models in the current blockchain investment field, reveal their operating methods, and provide a practical anti-fraud guide to help you stay awake in the tempting world of digital currency and avoid becoming the next victim.

Vigilance and rationality: From the incident of Gree's account being stolen and issuing coins to see the risk of digital currency fraud

(Full text 2950 words)

On May 19, 2025, the incident in which Gree Electric's official X account was hacked and released virtual currency information sounded the alarm for us about new digital fraud. As a practitioner of blockchain technology, I have seen the innovative potential brought by distributed ledger technology and witnessed the erosion of industry credibility by speculation. This incident revealed three key warnings:

1. Brand credibility weaponization: Attackers use the brand endorsement of listed companies to commit fraud. This "trust grafting" method is becoming more and more common in the encryption field. In March this year, the social media account of an international automobile brand was also hijacked to promote fake tokens, causing losses of more than one million US dollars in 24 hours.

2. Technical loopholes are humanized: The anonymous nature of blockchain combined with social media communication has formed a new hotbed for crime. Hackers no longer simply attack technical systems, but influence investors' minds by controlling communication nodes.

3. Transnational regulatory arbitrage: Multilingual content posted by stolen accounts shows that scammers are building a global trap. The borderless nature of blockchain projects and regulatory differences between countries create a natural barrier for accountability.

In the five years of my career, I have witnessed the value creation of high-quality projects, and I have also seen how countless scams overdraw industry credit. The current main risk forms present three characteristics:

1. Ponzi structure with packaging upgrade (typical case):

- In 2022, a DeFi platform promised a 30% monthly return and created the illusion of "automatic interest" through smart contracts

- The classic Ponzi model that actually uses the principal of new users to pay the income of old users

- The locked position value reached 120 million US dollars at the time of the collapse, and 95% of investors could not redeem

2. Chain change variants of pyramid schemes:

- Implement multi-level distribution in the name of "community co-construction"

- Induce users to develop offline through token airdrops

- A social mining project developed 200,000 members in 3 months and was eventually identified as an online pyramid scheme

3. Fraud covered by technical concepts:

- Forged professional concepts such as cross-chain bridges and Layer2 solutions

- Use NFTs for false asset securitization

- In 2023, a metaverse land sales project ran away with 80 million US dollars

In the communication with hundreds of investors, it was found that even participants with technical knowledge may still fall into the following psychological traps:

Cognitive Bias Quadrant:

- Anchoring Effect: Mechanically Applying BTC's Historical Increase to New Projects

- Confirmation Bias: Selectively Believe in Good Information and Ignore Risk Warnings

- Control Illusion: Overestimating One's Ability to Predict Market Fluctuations

Emotional Manipulation Model:

- FOMO (Fear of Missing Out): Creating Anxiety through Limited Releases, Countdowns, etc.

- Loss Aversion: Project Owners Deliberately Create Short-term Losses to Induce Users to Cover Positions and Dilute Costs

- Casino Effect: Instant Profit Feedback Stimulates Dopamine Secretion and Reduces Risk Sensitivity

Typical Case Analysis:

A DAO organization uses the "Governance Token Staking-Profit Acceleration" mechanism to allow early participants to obtain a 50% return in 7 days, inducing users to pledge more assets. When TVL (Total Locked Value) exceeded US$30 million, a contract loophole suddenly caused assets to freeze. After the audit, it was found that the so-called vulnerability was actually a preset backdoor.

Based on industry practice, we have summarized the participation strategy of "three-layer verification + four lines of defense":

Information verification pyramid:

1. Technical layer:

- Check the open source status of smart contracts (GitHub submission records)

- Verify the authenticity of on-chain data (block browser query)

- Test the speed of small deposits and withdrawals (recommended <$100)

2. Compliance layer:

- Query project entity registration information (OpenCorporates and other platforms)

- Verify the validity of regulatory licenses (such as MSB, VASP qualifications)

- Track the team's digital footprint (LinkedIn history cross-validation)

3. Market layer:

- Analyze the concentration of token distribution (Nansen and other on-chain analysis tools)

- Monitor social media sentiment index (LunarCrush and other platforms)

- Compare the economic models of similar projects (Tokenomics rationality)

Four principles of risk control:

1. Return expectation management:

- Anchor annualized returns to traditional financial markets (such as the long-term average return rate of US stocks of 7%)

- Establish a "return-risk" comparison table (Figure 1)

```

| Promised returns | Potential risk level | Recommended allocation ratio |

|----------|--------------|--------------|

| <10% | Medium | ≤15% |

| 10%-30% | High | ≤5% |

| >30% | Very high | Do not participate |

```

2. Asset isolation strategy:

- Set up a dedicated investment account (physically isolated from daily accounts)

- Use multi-signature wallets to manage large assets

- Keep more than 50% of liquid assets in compliant exchanges

3. Continuous learning mechanism:

- Invest at least 10 hours a month in researching the evolution of underlying technologies

- Track the developer activity index of major public chains (Electric Capital report)

- Participate in technical community code reviews (such as Gitcoin governance meetings)

4. Exit plan formulation:

- Set a hard stop loss line (recommended not to exceed 20% of the principal)

- Regularly evaluate the health of the project (team, code, community)

- Pre-plan extreme market response plans (such as black swan event handling process)

In the face of industry chaos, we must remain vigilant and avoid falling into the "demonization" cognition. Two core observations:

1. Technological innovation and financial speculation always coexist:

- Ethereum also faced doubts during its ICO in 2014, but eventually gave birth to the smart contract ecosystem

- Uniswap and other DEXs solve the pain points of the traditional market-making model

- Zero-knowledge proof technology promotes breakthroughs in privacy protection

2. Participatory wisdom in regulatory evolution:

- Pay attention to compliance trends (such as Hong Kong's digital asset trading license system)

- Identify the unsustainability of "regulatory arbitrage" projects

- Explore the boundaries of innovation within the compliance framework (such as RWA tokenization practice)

Conclusion: The law of survival dancing on the edge of a knife

As believers and critics of blockchain technology, we always adhere to three creeds:

- Believe in the code, but believe in the verified code

- Respect the market, but never blindly follow the market's enthusiasm

- Embrace innovation, but always retain the courage to exit

In this industry where 20K new tokens are born every day, the true value will never be annihilated by short-term chaos. When we internalize risk control into our investment genes and replace emotional drive with knowledge, we will neither miss the dividends of technological revolution nor fall victim to fraud games in the wave of digital currency. Remember: in this decentralized world, what should be managed most centrally is our own greed and fear.