TeamScammers are constantly seeking new methods to steal your cryptocurrency, and the rapid rise of crypto in recent years has provided many chances for scams to take place. Fraudsters stole $14 billion worth of cryptocurrencies recently, according to research from blockchain data firm Chainalysis. Therefore, cryptocurrency enthusiasts should be aware of the hazards and keep safe. Continue reading to learn how to recognize and prevent cryptocurrency scams.
7 Most Frequent Cryptocurrency Scams And How To Avoid Them
1. Giveaway Scams On Social Media
Scammers on social media will offer you ten times the amount for a small amount of cryptocurrency. Isn’t it too good to be true? Above all, keep in mind that you will not be required to transfer any cryptocurrency in advance to participate in a genuine giveaway.
Most importantly, it would be best to avoid these contacts on social media. They may come from accounts that appear identical to those you know, but this is all part of the game. Also, the hundreds of comments thanking these individuals for their generosity are either bots or fake accounts deployed as part of the giveaway scam.
2. Ponzi Schemes
Ponzi scheme fraud relies on bringing in new members with the promise of enormous crypto profits. Firstly, any investment offer that promises huge returns in a short time is a scam. These fraudsters will place an investor’s money in a pool and watch for new victims.
The strategy will maintain a constant flow of money from new to older investors, thereby repeating the cycle. Ultimately, this scam collapses when no further funds are received since it cannot pay out to older investors.
3. Malicious Mobile Apps
It’s easy to dismiss warning signs of fake applications if you’re not vigilant. In most circumstances, when you download a malicious app, it appears that everything is okay. But, they are specifically there to steal your cryptocurrency. Most victims download these malicious apps by mistake, thinking they are the original apps.
4. Phishing
Scammers frequently act as companies to get personal information from victims through phone and email. Meanwhile, these scammers don’t have a one-size-fits-all method for obtaining personal information.
You may receive emails stating that something is wrong with your exchange account and given a link to correct it. A bogus site will ask for your login information if you click on the link provided in that message. An attacker uses this strategy to obtain your login credentials and perhaps your crypto.
5. Bogus Initial Coin Offerings (ICOs)
ICO is a way for new cryptocurrency businesses to get money from people who might buy from them. Customers send popular cryptocurrencies like bitcoin to get a discount on the new currency. However, several ICOs have become fake, and criminals have gone to great lengths to scam investors. Among other things, they rented out fake offices and made high-end marketing materials.
6. Cryptocurrency Scams With Cloud Mining
A cloud mining service is a corporation that rents out mining equipment for part of its profits. For example, people can mine cryptocurrencies remotely without investing in expensive mining equipment. However, fraudsters have invaded the cloud mining industry, so you must be cautious not to lose your money or make less than what was promised.
7. Phoney Celebrity Endorsements
Cryptocurrency fraudsters may claim endorsements from celebrities to attract the attention of potential victims. Sometimes, this can include selling fake cryptocurrencies to inexperienced investors. Also, they use sparkling websites and booklets to showcase celebrity endorsements from big names.
How To Protect Yourself From Cryptocurrency Scams
Many cryptocurrency scams are complex and convincing. Here are a few safety measures you may take:
- Ignore a company that asks you to hand over your wallet keys in exchange for an investment opportunity.
- When upgrading your wallet app, stop the update and quickly delete the program if you observe any strange activity.
- Download programs only from authorized sources.
- Disregard unknown calls and get in touch with the company proper methods.
- Make sure the URLs of the websites you’re visiting are correct.
- Please keep track of the websites you often visit by bookmarking them.
- Avoid any investment that looks too good to be true.
Closing Thoughts
You need to be familiar with the most common crypto scams if you want to avoid getting taken in by them. Most importantly, always keep in mind that if an investment opportunity appears to be too good to be true, it almost certainly is a scam.
Please, visit our Finance Section to read more informative articles such as the Forex trading beginners guide, how currency exchange rates work, and Why you shouldn’t share your bank details with family and friends.
