8 Cryptocurrency Scams to Avoid
Cryptocurrencies are a hot topic now, and the subject is creating plenty of buzz. And with good reason—the value of a virtual currency like Bitcoin, Ethereum, XRP, Tether etc. has been on the rise for quite some time. As with anything that is popular, especially when it comes to financial transactions, there are a lot of scams surrounding them. In this article, we will discuss 8 cryptocurrency fraudulent schemes businesses need to avoid. We will also talk about what they are, how to spot them and what to do if you fall victim to one.
What is a Cryptocurrency Scam?
Elon Musk made news headlines for pumping up Dogecoin on Twitter, which caused the price to surge. And who could forget him joking about cryptocurrency being a “hustle” during a skit on “Saturday Night Live?” The joke caused laughs, and Dogecoin tumbled in the market at the time. Meanwhile, cryptocurrency hustles are no laughing matter.
For those who are unaware, a cryptocurrency scam is when someone uses the popularity of cryptocurrencies to trick people into giving them cryptocurrency transactions—which often take the form of money or personal information.
They might do this by promising to double your investment, offering free coins for signing up—or even simply asking for donations. Some scammers will also set up fake websites or social media accounts that look like they are associated with a legitimate cryptocurrency!
If you are new to cryptocurrency and its transactions and want to know more, you may find the following article helpful:
Common Cryptocurrency Scams to Watch Out for
Millions of dollars are lost every day in cryptocurrency scams. Fraud makes up the majority of them at around 30 percent. Luckily, being able to spot them can keep you from being swindled out of your hard-earned money.
To help keep you from being a victim of this seedy section of the cryptocurrency industry, here are 8 common scams to be aware of.
1. Downloaded Fake Cryptocurrency Apps
This type of cryptocurrency fraud comes in the form of fake apps that advertise an association with a certain type of cryptocurrency. In actuality, they are scammers trying to steal your money or personal information. They might do this by offering free coins for signing up or by promising to double your investment.
How to Avoid: You can avoid these scams by only downloading cryptocurrency apps from trusted sources, such as the App Store or Google Play. Barring that, be sure to research the app before you download it to make sure it is legitimate.
2. Phishing Scams
Phishing scams are another common type of cryptocurrency scheme. With this one, someone tries to trick you into giving them your personal information, such as your login credentials or credit card number. These scammers often do this by sending emails that look like it is from a legitimate website or by setting up a fake website that looks like the real thing.
How to Avoid: You can avoid these scams by being very careful about the emails you open and the websites you visit. If you are not sure if a website is legitimate, you can do a quick Google search to see if other people have reported it as a scam. You should also never click on links in emails or texts from people you do not know.
3. Digital Games & Collectibles
Giveaway scams are a form of social engineering attack that is used to convince you to send money to scammers. Digital games and collectibles are a specific type of giveaway scam, and they are usually perpetrated on popular social media sites like Youtube and Instagram.
With this giveaway scam, someone tries to trick you into giving them your money or private information by promising to give you a digital game or collectible, such as a skin for your favorite game or a rare Pokemon card.
A specific example of this happening was the squid game scam. It’s also known as a rug pull case, a malicious maneuver where crypto developers abandon projects and abscond with investors’ funds. Rug pulls are seen a lot with new crypto schemes.
During the time it happened, crypto exchange company Binance launched a probe into Squid token and froze the wallet addresses of all the token developers. It is estimated that the brains behind the scheme made off with $3.3 million before everything was over.
Does that mean everything involving such a thing is done? Not by a longshot. Unfortunately, sophisticated coders can now design imaginary worlds and games on the blockchain and launch the next social engineering attack as soon as the next hot Netflix show rolls around.
How to Avoid: The best way to avoid this type of trickery is, again, through detailed research. Know who you’re dealing with and what you’re getting yourself into. If someone promises you a rare or valuable item for free, be very, very wary. It’s likely a scam. Read More…
