The same type of crypto scams that plague Twitter are running rampant on Instagram in 2020.
For example, there are more than 1.3 million Instagram posts using #Coinbase, an overwhelming number of which display inauthentic behavior. Coinbase declined to comment on any past influencer campaigns, with the short statement: “We don’t have an active influencer campaign right now.” Instagram isn’t tackled specifically in the company’s blog post about social media scams.
Efforts to curtail this trend sometimes harm entrepreneurs like influencer and educator Rachel Siegel, better known as Crypto Finally. She was temporarily de-platformed from Instagram in July. For several days she was among at least three real crypto influencers, all young women, who temporarily lost access to their accounts.
“I think that the policies for banning over impersonation should be looked at, there are dozens of fake accounts impersonating me that are kept up on Instagram,” Siegel said. “I’m glad that they were able to reinstate my account, but I believe new preventative measures should be taken to protect their users from falling victim to scams and impersonators. Banning the original creator just makes the problem worse.”
Along with Siegel, the Argentinian influencer Catalina was also suspended. Instagram spokesperson Raki Wane told CoinDesk “the accounts were taken down unintentionally, when the mistake was discovered we overturned.”
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To be fair to Instagram, it’s clear COVID-19 fraud trends are outpacing current moderation practices. (I’ve been impersonated on almost every platform, including Instagram, along with many CoinDesk staffers. But scam accounts on Instagram try to contact or follow me weekly, more than other platforms, especially since the COVID-19 crisis began.) There are many authentic influencer accounts doing giveaways on Instagram as part of their COVID-19 marketing strategies.
Despite this climate, Instagram still does provide an important networking platform for the crypto industry. Especially in Latin America, some entrepreneurs rely on Instagram to communicate with customers about their products.
Brazilian entrepreneur Edmilson Rodrigues, of both Bonnum and Lovecryptonet, often serves Venezuelan refugees who rely on mobile apps for communication. He said he uses Instagram to both “show pictures of my family and to publish updates about our product.” He said he interacts with product users via Instagram at least once every few weeks, especially when his startup launches a new feature.
Yet another crypto company operating in Brazil, the Abakus Group-supported exchange Novadax, shows how startups leverage Instagram for customer relations during COVID-19.
Chinese investor turned Novadax CEO Beibei Liu said thousands of Brazilians used her exchange to buy bitcoin for the first time over the past few months. Out of roughly 150,000 user total accounts, she said surveys indicated 20% were new to crypto.
“We do a lot of basic educational content on Instagram,” Liu said, adding they also do Instagram Live sessions to answer user questions. “Instagram is a very important channel in Brazil, it’s a large population that is pretty young.”
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More than half of the exchange’s Brazillian users are mobile-only, Liu said, so mobile-friendly customer support options are crucial. Even for the minority of professional traders using the platform, such as Portugese-speaking liquidity providers in Europe or the United States, Instagram marketing helps the startup establish trust.
“They are more skeptical, they have concerns. So we post a lot of things related to our company background and team background,” Liu said about how the startup uses Instagram for customer relations with experienced traders. “It shows we are a trustworthy company. We show that we continue to update our products.”
Indeed, the company is officially opening support for European traders in August, after months of limited onboarding, to help boost liquidity and create a complementary flow between institutions and the emerging retail market. This is why authenticity on social media platforms like Instagram, which is so difficult for moderators to safeguard, is a key factor influencing cryptocurrency adoption patterns.
Speaking to the global dynamics of Crypto Instagram, where some users struggle to identify authentic accounts, Siegel said she hopes Instagram “will create a new model for a more active effort to protect their users.”
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