Cryptocurrency scams have been popular and there have been multiple victims of it.
Everyone wants to profit from this booming market. Since crypto has no central authority, it is vulnerable to scams. Crypto uses a decentralized control mechanism, a blockchain, which records transactions in the public record.
Also Read: Blockchain in government services: How blockchain will revolutionise and that’s just the beginning
It remains uncharted territory for many, so one should do extensive research before investing in it, thereby preventing the possibility of scams. People’s eagerness to make a quick buck coupled with a lack of information and steep growth of crypto value has attracted scammers.
Technical support scams
Sometimes a person with more knowledge than us is the one who is deferred to when there is money involved. Such scams aim to take advantage of such situations. A scammer’s objective is to get your crypto wallet passphrase in this case. Once they have it, they can transfer the crypto to another wallet.
Keep your passphrase/seed phrase private and offline. Don’t share it with anyone.
Viruses and malware scams
Using websites for buying cryptocurrencies creates a greater risk for investors due to the development of new malware and viruses. In such scenarios, malware programs steal investor balances by accessing their accounts.
Keep track of where you are being taken for the transfer, and use two-factor authentication on all your currency transferring apps. Likewise, watch out if an attachment is being downloaded automatically. Your system firewall and antivirus must also be updated.
Fraudulent giveaways
Everyone loves free stuff, right? Giving away cryptocurrency makes a good method of stealing in cryptocurrency scams because of its success. Scammers use Telegram and Twitter to spread the word about crypto “airdrops” – that is, free cryptocurrency sent to your wallet.
Scams involving NFTs
Currently, these are the craze in the crypto market. NFT scammers often use artist impersonation to scam their victims. Usually, scammers attempt to sell famous pieces at very low prices as soon as possible, in order to avoid being reported. The scammers also use fake store fronts, deceitful bidding, and brand impersonation to defraud you
It is always a good idea to purchase from a verified account. Never provide your personal information to anyone or to a site that seems even the slightest bit shady
The altcoin pump and dump
An altcoin pump and dump scam, similar to penny stocks, has also terrorized investors in cryptocurrency.
A crypto influencer buys large quantities of a cheap coin and starts promoting it on social media. In turn, the investors would buy the coins, increasing the coin’s value. A massive profit is earned when the influencer lets go of all coins.
Beware of celebrities using gimmicks to promote their products. DYOR!
Fraudulent employment opportunities
Employment scams can target students and job seekers. The new boss offers them bitcoins for completing tasks, then tells them they now owe him money.
Recruiters can also pose as criminals, and social media is awash with complaints about thieves offering high-profile positions as a way to steal information
Be on the lookout for fraudulent job opportunities. Verify that the job is legitimate
Crypto phishing scams
In many ways, crypto phishing scams are the same as phishing emails, SMS texts from unknown numbers, or any other annoying con. They are unfortunately common.
In order to steal substantial funds, scammers often announce fake token sales. Never believe these phony emails or websites. Review them carefully before investing your money.
Cryptocurrency Ponzi and pyramid schemes
Cryptocurrency reports about people making great money from it naturally attract other investors. But there are opportunists out there ready to steal your coins by pulling a classic Ponzi scheme.
When new investors entrust their money to a Ponzi scheme, instead of investing it in assets, they get paid what they assume to be significant returns from the earlier investors – thus attracting even more investors.
The fraudsters use this process to capture some money for themselves. For instance, Bitconnect.
You should be wary of investment opportunities that offer unrealistic returns
DeFi Cryptocurrency scams
Decentralised finance is abbreviated as DeFi. The platform makes traditional trading methods more user-friendly and allows more people to participate by giving a new look at conventional methods. By investing in companies with cryptocurrency, investors are able to earn interest from their investments. In return, the firm gains heavy profit from locking up the virtual money
Fraudsters love it because it allows them to make a fake-looking DeFi site that looks real, although it isn’t. Through contracts, investors are forced to lock up their money. Once stolen, the money is never returned to the owner.
Research the platform thoroughly before investing your money, and don’t be too eager to earn profits or interest. If the administrator asks for your private keys to resolve a problem, that is a red flag that the admin is an impersonator.
