On-chain detective ZachXBT reports a growing black market for accounts known as "Verified Organizations." These accounts were intended to help X users (formerly Twitter) distinguish genuine profiles of prominent organizations from fake ones.
In less than 48 hours, ZachXBT came across twelve accounts with the gold check mark proving they were verified by X, even though these profiles were obviously fake.
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One of them, an account posing as Inverse Finance, an open-source protocol for borrowing funds at a fixed price, had the X name "InverseFlinance." This account lured X users to participate in a fake distribution of INV tokens, promising financial rewards only to the first 500 users.
Another example was a fake account impersonating the X profile of the popular liquid-staking ecosystem Lido, registered by the name "LidoFimnance." This one promoted a phishing website that was supposed to lead X users to register for the Lido DAO.
As crypto influencer Jakeofranko noted, most of the phishing scam accounts that appear on the social media platform as Verified Organizations have been present on the platform for less than a month and have hardly any posts or followers. The fact that most of these fake accounts can be easily detected makes many X users doubt the quality of the verification process.
ZachXBT reached out to the X team for help with this growing problem. "Verified Orgs [organizations] were intended to make it harder for scammers, but it has just created a new black market for accounts with no way for us to report and take down these accounts easily," the Web3 sleuth complained in his post.
X's official website states, "X Verified Organizations enables organizations of all types – businesses, non-profits, and government institutions – to sign up and manage their verification, and to affiliate and verify any related account."
The X team further explains, "Any organization that purchases a subscription to Verified Organizations will receive a gold checkmark and square avatar if they are a business or non-profit, or a grey checkmark and square avatar if they are a governmental or multilateral organization."
X has introduced quite high fees for such verification. At press time, the feature was offered on a subscription basis and required a monthly payment of $1,000 and $50 per "each additional affiliate." These prices did not include any applicable taxes and varied for different regions.
According to the fragment of a tweet from Elon Musk that ZachXBT shared with his followers, the reason for such a payment is "to set a moderately high bar to be a verified org, so that an org must be of a non-trivial size to qualify, and to make it expensive for scammers to create millions of accounts."
The instructions on X’s website state that organizations must add their "eligibility criteria" to the signup form and wait for the team to review and approve the account. Some of those criteria include providing "a matching active X account," which an organization must have access to. The X team will authenticate this account to activate the subscription for Verified Organizations. Other compulsory information includes the organization's current email address and website domain.
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Unfortunately, the verification process does not seem to be effective, considering the popularity of fake accounts with the gold check mark. At the same time, the social network team underestimated how much scammers are willing to pay for Verified Organizations accounts, as some of the X users noted. ZachXBT and some of his followers claim that scammers purchase verified accounts on Telegram.
On-chain analyst Yazan emphasized that after tracking some exploits that had happened due to the fishing links promoted in paid ads posted by Verified Organizations, it became clear that losses often amounted to "five-figure numbers" until the phishing accounts were taken down. Yazan also stressed that "the same thing is happening at Meta platforms, but the damage is not as significant."
ZachXBT and his followers have called on Elon Musk and the official social media accounts of X and its Premium subscription program to take action against the spreading scams. Some of the X users also believe that the platform should be held responsible for allowing phishing scammers to promote their websites.
Meanwhile, many X users are rather skeptical about the feature of Verified Organizations accounts in general, believing it was introduced "to make money and not to prevent any bots or scam" whereas "the golden tick seems to give you a green light to scam" as the X team has not proposed any solution despite "hundreds of reports."
