The Language of Crypto-fraud -Text Analysis of Social Media Campaigns Surrounding the Launch of Fraudulent Cryptocurrencies

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Abstract

The paper summarizes the initial findings from a study on a select subgroup of cryptocurrency frauds which involve a large-scale social media campaign to lure potential investors, such as “pump and dump” scams and “rug pull” schemes. The aim of the study is to identify the linguistic characteristics of social media campaigns surrounding issuance of fraudulent coins or tokens.
Such campaigns are central because the success of the fraud rest on the momentum of the social media discourse, which is not only generated by the offenders, but develops an eigendynamik, and is produced by a diverse group of actors, the victims of the fraud included.
We create two distinct samples. Both samples contain text from social media campaigns to introduce a new token or coin. Sample 1 includes cases of legitimate cryptocurrency issuances. Sample 2 includes cases that can retroactively identified as had been fraudulent from the start.
For the sample, we draw data from several social media platforms about the selected cryptocurrencies, such as Discord servers, subreddits, youtube comments, as well as texts from algorithmic advertisements.
We then use semi-supervised learning algorithms to conduct text analysis of the on the obtained material.

Authors

• Csaba Györy, ELTE University Faculty of Law, Budapest / Institute of Legal Studies, Centre for Social Sciences, Hungarian Academy of Sciences

• Fernando Miró-Llinares, Miguel Hernández University of Elche

• Jesús C. Aguerri, Miguel Hernández University of Elche

• Miklós Sebők, Hun-Ren Centre for Social Sciences, Institute of Political Sciences