Posted by Sponsored Post Posted on 21 April 2022

Avoiding Cryptocurrency scams

The rise in popularity of cryptocurrencies has also increased the opportunities for unscrupulous actors to take advantage of the crypto space’s flaws and defraud innocent consumers.

Fraudsters stole over $7.8 billion worth of bitcoin in 2020, and this number quadrupled in 2021, with scammers stealing over $14 billion worth of cryptocurrency in the previous year. Every day, new sorts of cryptocurrency scams emerge, and if you’re not careful, you could become a victim. And these days, you need not beat your head if you have lost money to a cryptocurrency scam. Because many cryptocurrency scam recovery firms have been established, the primary purpose of these firms is to bring justice to scam victims, and they will fight tooth and nail to deliver it to you. 

Below are some of the most popular cryptocurrency scams to avoid.

Phishing

Phishing is a common scam wherein a scammer tries to obtain your personal information such as name, address, SSN, and passwords by sending you an email. Phishing scams come in various shapes and sizes, and they might start with an innocuous phone contact, text, or email. Phishing schemes using cryptocurrency are widespread on forums, messaging applications, and social media sites.

The fraudster will frequently impersonate any person from a corporation, such as a state official or a spokesperson. They’ll try to trick you into giving them your personal info subsequently.

For example, if you post that you need assistance with a cryptocurrency platform, the fraudster may contact you and pose as a customer support staff member. They may require you to fill out a form or grant them access to your computer to assist you. But, as soon as they have the chance, they’ll take your information and perhaps transfer your digital assets to an account they manage before you can even realize what’s going on.

Giveaway 

Cryptocurrencies are regularly discussed over the internet by high-profile celebs and businesspeople. Extortion scams that use freebies to extract money rely on a long-standing extortion habit. Scammers often impersonate well-known people, sometimes constructing social media identities complete with photos and bios.

The con artist may claim to be handing out cryptocurrency tokens. You must first transfer their money before sending them more money to be eligible for the “giveaway.” However, in actuality, they will simply take your money and flee.

Investment 

You must also be skeptical of any investment offers that seem too tempting. Scammers may refer you to a website to learn more about the prospective “deal,” or they may outright ask for money. They could even be impersonating someone else. In addition, scam techniques can be layered on top of each other or combined to create new frauds.

“Exit scams” and “rug pulls” are two prevalent crypto investment frauds.

  • An exit fraud occurs when a company gets funds through an initial coin offering (ICO) but swiftly exits and steals the funds before delivering a product.
  • A rug pull is a form of decentralized exchange exit fraud in the DeFi sector (DEX). A new coin is generated and put on an exchange with a rug pull, and they may try to market it online heavily. Unfortunately, the coin’s developers pull out of the project once individuals switch their cryptocurrencies for the new token, leaving investors with worthless coins.

Fraudulent websites 

Novice crypto users may be duped into visiting bogus websites that promise ‘huge’ investment opportunities or cryptocurrency mining. However, many of these websites appear genuine, and they may persuade you that your money will grow.

While the investment may be simple, the chances of you receiving your money back are nearly impossible because scammers take all the money and shut down the website as soon as they have collected enough. In addition, scammers can often imitate businesses and construct websites that appear identical to the originals to prey on naïve clients.

Fraudulent mobile apps

Scammers are increasingly relying on fake mobile apps to defraud cryptocurrency users. These mobile apps aim to deceive users into believing they are using a legitimate app, allowing criminals to obtain users’ digital wallet information.

For example, when a fake software with a similar name and user experience appeared on Google Play, scammers targeted Poloniex, a prominent crypto asset trade app. The organization did report the fake program, but by the time it was ultimately taken down, it had already been downloaded by over 10,000 customers, putting their account security in jeopardy.

Blackmail

Some crooks will try to blackmail you with actual or made-up damaging or humiliating facts. For example, they may threaten to send compromising recordings or photographs of you to everyone on your phone or email contact list. Alternatively, they might keep the threat ambiguous by claiming they’ll reveal “a secret” but not specify it.

Scammers frequently demand payment in Bitcoin or another cryptocurrency, bringing cryptocurrency into the equation. You can contact the FBI immediately to report any extortion or blackmail attempts.

Marketplace

Customers are solicited to send cryptocurrency for a product they purchase on an online marketplace in marketplace scams. To make it easier for crypto fans to buy things, many eCommerce companies now accept cryptocurrency as a form of payment. However, this does not imply that all websites claiming to take cryptocurrencies are legitimate.

Scammers might create false seller accounts or entire websites to entice naive buyers to make cryptocurrency purchases. Then, following the receipt of orders, the con artists will either shut down the website or sell counterfeit goods instead.

Fraudulent verified accounts

Another method con artists use to steal cryptocurrency is to take advantage of social media platforms’ trust signals, such as blue checkmarks on Twitter. Scammers will utilize a blue checkmark in profile photographs or wallpaper to add a blue check in the correct position. Open Instagram accounts have similar marks but no pop-ups. Verify an account’s authenticity by looking at the number of followers and other indicators.

Conclusion

While appealing, the cryptocurrency world is dangerous. Speculating and investing is what happens here. You need proper knowledge and research. Before entering the crypto world, understand the risks, know about scams and their types and learn to spot them. 

 


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